Gratuity Eligibility: Work in India is changing. The government has recently introduced a big update to the labour laws. Instead of 29 old and confusing laws, there are now four main Labour Codes. These changes aim to make rules simpler for businesses while protecting workers’ rights.
The four new codes are: Code on Wages, 2019, Industrial Relations Code, 2020, Code on Social Security, 2020, and Occupational Safety, Health and Working Conditions Code, 2020. They cover almost everything about work—from daily Working Hours and social security to Gratuity Eligibility and Minimum Wages. One important change is that Gig Workers are now included, which means more people will get benefits and protections, not just permanent employees.
Gratuity Eligibility: What’s New
One of the biggest changes is about gratuity eligibility. Before, workers had to work five years in the same company to get gratuity. Many temporary or fixed-term workers didn’t qualify.
Now, even fixed-term employees can get gratuity after just one year of service. This is a big step to treat temporary and permanent workers more equally.
The rules for calculating gratuity and other benefits have also been simplified. Half of an employee’s total salary (or a set percentage) will count for calculating gratuity eligibility. This stops companies from lowering the benefits by putting too much of the salary into allowances. This makes sure workers get fair and clear benefits.
Gig Workers Get Protection
Gig workers—like food delivery riders, freelancers, and taxi drivers—usually don’t have the same benefits as regular employees. The new labor codes change that. They officially define what gig work is and include these workers under social security laws.
The Code on Social Security, 2020, creates a special fund for gig workers. This fund will provide life insurance, health benefits, and retirement support. Millions of gig and platform workers will finally have a safety net.
Working Hours and Flexibility
The new rules also change working hours. Companies can now have shifts from 8 to 12 hours a day, as long as the total hours don’t go over 48 in a week. Workers must be paid double for overtime, so longer hours are fair for employees.
Work-from-home rules are also officially recognized. Employees can now work from home if both the employer and worker agree. This helps with flexible work schedules and hybrid work arrangements, which are becoming normal after COVID-19.
Layoffs Made Easier for Businesses
The Industrial Relations Code, 2020, makes layoffs simpler for businesses. Earlier, companies with 100 or more employees needed government permission to lay off workers. Now, this limit has been raised to 300 employees. Companies with fewer than 300 workers don’t need prior approval.
States can increase this limit if they want. Even though layoffs are easier, companies still have to give notice and pay compensation to the affected employees.
Minimum Wages for Everyone
The new rules make minimum wages applicable to all workers, whether in the organized or unorganized sector. The central government will set a floor wage, which means no state can go below this minimum. This ensures workers earn enough to cover basic living costs.
The codes also support gender equality. Women will get equal pay for equal work and can work night shifts if safety measures are in place. Maternity leave of 26 weeks is now available to all women, even in unorganized jobs.
What This Means for Workers
The new labor codes are a major step forward. They include gig workers, make working hours flexible, simplify layoffs, guarantee minimum wages, and most importantly, make gratuity eligibility easier for fixed-term employees.
This change is expected to help millions of Indian workers. By simplifying rules and making benefits fair, the government is creating a safer, stronger, and more modern work environment for everyone.