You Can Now Get Gratuity After Just One Year
By: Nikhil Pandey
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4 Apr 2026
India's new Labour Codes give fixed-term workers gratuity rights after just one year
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Previously, all employees had to complete five continuous years before claiming any gratuity
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The four Labour Codes consolidated 29 old laws, taking effect from 21 November 2025
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Only fixed-term employees on written contracts benefit; permanent staff still need five years
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The new one-year rule applies only to employees who joined after 21 November 2025
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Gratuity for fixed-term workers is calculated on a pro rata basis per service duration
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New rules require wages to form at least 50% of an employee's total CTC
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Many firms kept basic pay low to cut statutory dues; that loophole is now closed
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Gratuity is capped at Rs 20 lakh and calculated using the standard 15/26 formula
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Analysts project gratuity liabilities for Indian companies will rise by 25 to 50 percent
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