Payment of Gratuity (Amendment) Bill, 2017 – GK Updates

Dear Aspirants Here we have given brief details about Payment of Gratuity (Amendment) Bill, 2017 in the exam point of view. Candidates those who are preparing for IBPS / SBI / SSC / Insurance exam and all other competitive exams can use this.

The Lok Sabha has passed Payment of Gratuity (Amendment) Bill, 2017 to empower government to fix period of maternity leave and tax-free gratuity amount with an executive order. The Bill seeks to amend the Payment of Gratuity Act, 1972.

About Gratuity:

Gratuity is given by the employer to an employee for the services rendered by him. It is usually paid at the time of retirement but it can be paid before provided certain conditions are met. A person is eligible to receive gratuity only if he has completed at least five years of service with an organisation. However, it can be paid before the completion of five years at the death of an employee or if he has become disabled due to accident or disease.

Payment of Gratuity Act, 1972

It allows for payment of gratuity to employees in any establishment, factory, mine, oilfield, plantation, port, railways, company, or shop employing 10 or more workers.  Under it, employees are paid gratuity if they have provided at least 5 years of continuous service at time of termination.

Key Features of Bill

  • The Bill empowers central government to notify period of maternity leave eligible for qualifying as continuous service and determine amount of gratuity available to employees.
  • The maximum maternity leave, for the purpose of calculating continuous service under the Act, was based on the maternity leave provided under the Maternity Benefit Act, 1961. The Bill removes the reference to 12 weeks in Maternity Benefit Act, 1961 and empowers central government to notify the maximum maternity leave. Under the Act, maximum maternity leave was 12 weeks and was changed to 26 weeks by Maternity Benefit (Amendment) Act, 2017.
  • The Bill removes the existing ceiling of Rs 10 lakh amount of gratuity payable to an employee and states that the ceiling may be notified by the central government.