Labour Ministry could widen scope of gratuity to include contract, seasonal, gig workers

NEW DELHI: The labour ministry may widen the scope of gratuity to include contract workers, gig workers, seasonal workers and fixed-term employees by reducing the threshold on the minimum work requirement of five years to be eligible for it and reducing the component of gratuity for different categories of workers.

The various options being considered include gratuity at the rate of seven days’ wages for each season for seasonal employees and gratuity at the rate of 15 days’ wages or such number of days as may be notified by the government for every completed year of service in excess of six months for daily or monthly wage earners and contract workers.

The other option is to reduce across the board the minimum work requirement from five years to two-three years for all categories of workers to make them eligible for gratuity.

“Various proposals are being made. We are considering all options. However, no decision has been taken yet,” a senior official told ET.

Under the Payment of Gratuity Act, an employee is eligible for gratuity on the termination of his employment after he has rendered continuous service for a minimum of five years. Gratuity is equivalent to 15 days of salary for each year an employee has spent in an organisation.