In a press release dated 22nd March, 2018, the Ministry of Labour & Employment has stated that the Payment of Gratuity (Amendment) Bill, 2018 has been passed by the Parliament on 22nd March, 2018.
The bill ensures harmony amongst employees in the private sector and Public Sector Undertakings/ Autonomous Organizations under Government who are not covered under CCS (Pension) Rules. These employees will be entitled to receive higher amount of gratuity at par with their counterparts in Government sector once the Bill comes into force. As per the 7th Central Pay Commission, the ceiling has been raised to Rs. 20 Lakh for Government servants.
The present upper ceiling on gratuity amount under the Payment of Gratuity Act, 1972 is Rs. 10 Lakh. Considering the inflation and wage increase even in case of employees engaged in private sector, the Government has decided to revise the entitlement of gratuity under the Payment of Gratuity Act, 1972. It has been stated in the Press Release that the limit of gratuity maybe increased to such amount as may be notified by the Central Government from time to time.
The Bill also seeks to amend the provisions relating to calculation of continuous service in case of female employees who are on maternity leave from ‘twelve weeks’ to such period as may be notified by the Central Government from time to time.
Source: Press Information Bureau