Gratuity is a reward given by the company, which is given to the employee in return for his excellent services for a long time. According to the rule, when you work continuously for 5 years in a company, then you become entitled to gratuity. But if an employee worked in a company for 4 years and 11 months, meaning only 1 month was less than the completion of 5 years, then in this situation will the company give him gratuity? Understand the rules that every employed person should know.
If the job is less than 5 years
According to the rule, if an employee has worked in a company for 4 years and 8 months, then his job is considered to be of full 5 years and he is given gratuity amount according to 5 years. But if the job is for less than this, that is, 4 years 7 months or four years and a half months, then it will be considered only 4 years and in such a case he will not be given gratuity.
Does notice period count?
Yes, while counting the period of gratuity, the notice period of the employee is also counted. Suppose you resigned after working in a company for 4 years and 6 months, but after resignation you served a notice period of two months. In such a case, your total service in the company was 4 years and 8 months. Considering it as 5 years, the employee should be given his share of gratuity.
The rule of 5 years does not apply in this case
If an employee dies during the job, then the condition of 5 years of service does not apply. In such a case, the entire amount deposited in the gratuity account of the employee is given to his nominee.
This is how gratuity is decided
There is a formula to decide the amount of gratuity. This formula is – (last salary) x (how many years worked in the company) x (15/26). Last salary means the average of your last 10 months’ salary. This salary includes basic salary, dearness allowance and commission. 4 days in a month are week off on Sundays, so 26 days are counted and gratuity is calculated on the basis of 15 days.
This is the rule in case of a company
If 10 or more people work in a private or government company, then that company should give the benefit of gratuity to all the employees. Apart from the company, shops, mines, factories come under the purview of this rule.
Related Articles:-
Passport Documents: What documents are required to get a passport? know documents list here
