If the employee’s job is less than five years but a few months, he is still entitled to gratuity. Know what Section 2A of the Gratuity Act says.
Gratuity is a reward given by the company to the employee, which is given to him in return for continuous service in the company. It is generally believed that you become entitled to gratuity only after the completion of five years. There is a formula to decide the minimum amount of gratuity. But if the company wants, it can also give more amount to its employee than the prescribed formula. However, according to government rules, more than 20 lakh gratuity cannot be given to an employee. But in such a situation, the question of many people is that if their job is not for full five years, if it is less than that, then are they entitled to get gratuity? Let us tell you about this.
What does gratuity act say
As per Section 2A of the Gratuity Act, even if you have not completed 5 years of service, you can still be entitled to gratuity. Section 2A of the Gratuity Act states that employees working in underground mines who work in a company for 4 consecutive years and 190 days, then they are considered entitled to get gratuity. On the other hand, if the employees working in other institutions complete 4 years and 240 days i.e. 4 years and 8 months of the job, then they become eligible to get gratuity. In such a situation, this period is considered as a full 5 years.
Notice period would also be calculated
It is also important for you to know that your notice period is also counted in this period. That is, if an employee is completing 4 years and 240 days of service with notice period, then he retains the right to get gratuity. The notice period is also counted in the continuous service.
Gratuity is calculated with this formula
A formula to calculate gratuity is – (last salary) x (number of years worked in the company) x (15/26). Last salary means the average of your last 10 months salary. Basic salary, dearness allowance and commission are included in this salary. Due to 4 days of Sunday being week off in the month, 26 days are counted and gratuity is calculated on the basis of 15 days.
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