India's Labour Code Overhaul: New Rules Simplify Gratuity Eligibility for Workers

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The Indian government has rolled out four comprehensive labour codes, consolidating 29 outdated laws to modernize the nation's labour ecosystem. A key feature of the new codes is the revised gratuity eligibility rules, which are set to benefit a large and diverse workforce. Gratuity is a lump-sum payment made by employers to employees as a token of appreciation for their long-term service. Traditionally, it was paid after five years of continuous service and upon retirement, resignation, or termination. However, the new labour laws may allow for eligibility after one year of service under certain circumstances. Under the new codes, fixed-term employees (FTEs) can access gratuity after completing a single year of service, ensuring parity with regular staff. The updated provisions guarantee FTEs the same salary structure, leave entitlements, medical benefits, and social security coverage as permanent workers. The new labour codes also introduce other significant changes, including: * Businesses can now employ workers for shifts ranging from 8 to 12 hours a day, with a total weekly cap of 48 hours. * Contractors can obtain a single licence, valid for five years, that allows them to operate across the entire country. * The codes formally define gig and platform work, bringing these workers under the ambit of social security benefits. * A provision for work-from-home in service sectors has been introduced, allowing for flexibility based on mutual agreement between employers and employees. The labour code overhaul aims to modernize India's labour ecosystem, enhance workers' welfare, and drive labour reforms for a future-ready workforce and stronger industries.