New Labor Reform Low: Is getting gratuity in just one year now a reality? The government made a major change and reduced the eligibility from 5 years to 1 year. Wage definition was increased, due to which the gratuity amount will also increase. The new labor codes replace 29 old laws.
New labor laws 2025: The Government of India has made such a big change in the labor sector, knowing that only one question is arising in the mind of every employee, will they now get gratuity after just one year of service? So the answer is, yes, now it is true. The government has reduced the eligibility of gratuity from 5 years to just 1 year, and this will directly benefit lakhs of fixed-term workers. The decision is part of four new labor codes implemented from November 21, through which 29 old laws have been replaced with a new, modern system. With this change, another big update has come – the definition of wages has been increased, that is, now gratuity will be calculated on a larger base. This simply means that employees will get more gratuity than before.
Is it really possible to get gratuity in just one year?
Earlier, to receive gratuity, employees had to complete five years of continuous service. But now fixed-term employees will become entitled to gratuity after just one year of continuous service. The government believes that fixed-term contracts have become common in many industries. In such a situation, the mandatory requirement of 5 years was not justified. Now the new rules have been prepared as per the modern job pattern.
How will your gratuity increase with the new definition of wages?
Under the new rules, many additional parts have been included in the wedge. The biggest change is that now while calculating the wage, the gratuity component will also be included in the calculation. This will have two benefits:
- 1. Base amount of gratuity will increase
- 2. Employees will get more amount
This change is said to be mainly in the interest of the employees.
Will fixed-term employees now get the same benefits as permanent employees?
Yes, absolutely. Fixed-term workers in many industries including the export sector will now get these benefits:
- gratuity
- Provident Fund (PF)
- Social Security Benefits
This means that now even if the job is not permanent, the security will be permanent.
What changed with the implementation of the four labor codes?
The four labor codes in effect from November 21 are:
- Code on Wages, 2019
- Industrial Relations Code, 2020
- Code on Social Security, 2020
- Occupational Safety, Health and Working Conditions Code, 2020
With their arrival:
- Appointment letter is mandatory for all employees
- Social security cover to Gig and Platform Workers
- Free health checkup for workers aged 40+
- Women have the freedom to work at night, with safety conditions
The government claims that these changes will help give India a flexible, secure and modern labor market.
Will this reform take India’s workforce to global standards?
The government says that these codes will modernize India’s labor system by freeing it from colonial laws. This structure prepared as per global pattern is said to be beneficial for both workers and companies. This reform is a big relief for millions of employees who did not expect gratuity in fixed-term, contract or project based jobs. Now, even after working for just one year, he will be eligible for his rights.
Why was the eligibility of gratuity increased to one year?
- The government says that the need of the hour is to give fixed-term employees the same benefits as permanent employees.
How will employees benefit from the new definition of wages?
- Now the gratuity calculation will be on an increased wage base, due to which the amount may increase.
What will change with the implementation of four labor codes?
- Appointment letter is mandatory, Social Security for Platform Workers (Social Security for Gig & Platform Workers) and free health checkup for 40+ employees are included.
Are the new rules better for both companies and employees?
- The government says that this model matches global standards and makes the workforce modern and secure.