Gratuity Eligibility: Do Employees Really Need to Complete 5 Years of Service?

Hi, could you kindly provide me with written confirmation that an employee becomes eligible for gratuity only after completing five years of service, unless the company has obtained an exemption for this requirement? Thank you.

Dear mishraprakash87,

You can refer to the Payment of Gratuity Act. It does not state that 5 years of service are required. If an employee works for 4 years and 240 days, then they are still liable for gratuity as per the act.

You can go to this link to find out about the Gratuity Act and other important acts: http://www.peshr.com/Resources/Brief...alSecurity.pdf. Hope it will be useful and resolve your query.

Hi,

Can anybody help me regarding Gratuity? I am working in an ISO standard BPO from 2005 until the present. I will resign on 31st March 2011. In the first year, from October 2005 to October 2006, I was not directly on the company's payroll (probation period). From October 2006 until now, I have been on the company's payroll. I have completed a total of 5 1/2 years. So, my question is, am I eligible for Gratuity or not?

I asked my company, and they told me that I am not eligible because from October 2005 to October 2006, I was not on the company's payroll. Please help me with this issue ASAP.

Sangeeta W.

There was an amendment that took place in the Gratuity Act on May 24th, 2010. This amendment raised both the gratuity ceiling and exemption to ₹10 lakh from ₹3.5 lakh. Are both conditions true or partially true? Please share.

Exemption from the application of the Payment of Gratuity Act is conditional. The establishment seeking exemption should have a scheme providing gratuity and pensionary benefits that are not less favorable than what is provided in the Act. Rules of the Scheme should not be in conflict with the provisions and rules framed under the PG Act.