Gratuity ceiling of employees increased - Fusion - WeRIndia

Good news for central government employees! The Central government has increased ceiling of gratuity amount for employees after the implementation of the 7th Pay Commission.

With this, the gratuity amount has increased to ₹20 lakh which is ₹10 lakh so far.

As the maximum ceiling has not been revised for the last seven years, the Central government has decided to increase the ceiling for gratuity of employees considering the inflation in the country.

A Bill was introduced by the government in the Lok Sabha on Monday so that the central government employees can be notified about the availability of the period of maternity leave and ceiling of gratuity.

Labour Minister Santosh Kumar Gangwar introduced the Payment of Gratuity (Amendment) Bill, 2017 in the House.

In order to provide gratuity payment to employees that were employed in factories, oilfields, plantations, mines, ports, railway companies, shops etc. the Payment of Gratuity Act 1972 was enacted.

This Act is applicable to all establishments which has ten or more employees.

And any employee who has completed a minimum of five years of continuous service in any such establishment is eligible to receive gratuity payment.

The gratuity amount is calculated on the basis of a formula. This formula is as follows. The wages of 15 days of an employee for each year of completed services is his gratuity amount. However, the maximum amount should not exceed ₹10 lakh. This limit was fixed in 2010.

The ceiling was fixed generally based on the recommendations of Central Pay Commission.

Now, the inflation and wage increase are taken into account for all the employees of public and private sectors and the ceiling has been increased accordingly.

The statement of Ministry reveals that the ceiling has been revised time to time by considering the above factors and are also based on the recommendations of Pay Commission.

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