Are Contract Workers Really Entitled to Gratuity and Earned Leave? Let's Discuss the Rules

Most organizations do not pay gratuity and earned leave to contract workers. This means they are not eligible for gratuity and earned leave. Could you please inform me about the rules regarding leave, gratuity, and bonus for contract workers?

Thank you.

As per the contract act, they are eligible, but only a few contract companies pay it. However, remember that they all maintain a fake register for the same.

As per Section 8 - Eligibility of Bonus, every employee shall be entitled to be paid by their employer in an accounting year, a bonus in accordance with the provisions of this Act, provided they have worked in the establishment for not less than thirty working days in that year. Gratuity and leave are both applicable for contract workers. Leave calculation is 20:1, or gratuity as per the Gratuity Act ((Basic+DA)/26*15=***).

Thank you.

Regards,

The contract workers are also the workers of contractors, and they are eligible for gratuity, earned leave, and bonus. It is the principal employer's liability to pay these benefits to workers.

Regards,
Rahul

Dear Abhijeet, thank you for your information. Could you please share any circular or rules under any section where it is mentioned?

Regards,
Pankaj Kr. Das

Clarification on Contract Workers' Benefits

With due respect, I believe there might be a conceptual misunderstanding. You mentioned that contract workers are also workers of contractors and stated that it is the liability of the principal employer to pay these benefits to contract laborers.

Typically, contract laborers are of a transient nature. They are not employed with a single principal employer consistently. My question to you is: under such circumstances, how is the principal employer liable to pay leave, bonus, and gratuity for services that were not rendered to them or were rendered to someone else?

Regards