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Your rights

Am I entitled to gratuity?

Short answer

Yes, if you have worked for 5 or more years continuously. Gratuity equals 15 days wages multiplied by years of service. Maximum is 20 lakhs. Even contract employees are eligible.

Understanding the issue

Under the Payment of Gratuity Act, any employee who has completed 5 continuous years of service is entitled to gratuity upon resignation, retirement, superannuation, or termination. The formula is: (Last drawn salary × 15 × years of service) / 26. The maximum gratuity payable is ₹20 lakhs. In case of death or disability, the 5-year requirement is waived. Gratuity must be paid within 30 days of it becoming payable. Even contract workers and fixed-term employees are eligible. If your employer refuses to pay gratuity, file an application with the Controlling Authority (Labour Commissioner) who can order payment with interest.

Laws that apply

  • Payment of Gratuity Act — Section 4 (Payment of gratuity)
  • Code on Social Security, 2020