Fixed-Term Employee Gratuity — SS Code 2020 Section 53 Se Pro-Rata Milegi, 5 Saal Ka Wait Nahi
| Feature | Regular Employee | Fixed-Term Employee (SS Code) |
|---|---|---|
| Minimum Service for Gratuity | 5 years (240 days/year rule) | No minimum — pro-rata from day 1 |
| Formula | (Basic+DA) × Years × 15/26 | Same formula, actual days served |
| Legal Basis | Payment of Gratuity Act 1972 | Code on Social Security 2020, Section 53 |
| Tax Exempt Limit | ₹20 lakh (private sector) | ₹20 lakh (same) |
| Scenario | Service | Basic | Gratuity |
|---|---|---|---|
| Regular employee | 3 years | ₹30,000 | ₹0 (5 yr minimum not met) |
| Fixed-term employee (SS Code) | 3 years | ₹30,000 | ₹30,000 × 3 × 15/26 = ₹51,923 |
| Fixed-term employee (SS Code) | 1 year 6 months | ₹25,000 | ₹25,000 × 1.5 × 15/26 = ₹21,634 |
5-Year Rule Se Azaadi — Fixed-Term Employees Ke Liye
Regular employees ke liye gratuity ke liye minimum 5 years of continuous service chahiye (pehle Payment of Gratuity Act 1972 ke under tha; ab 21 November 2025 se Code on Social Security 2020 ke under — regular employees ke liye 5-year rule same continue hota hai). Yeh often unfair lagta hai un employees ke liye jo contract jobs mein 1-3 saal kaam karte hain.
Code on Social Security 2020, Section 53 ne yeh change kiya fixed-term employees ke liye. Fixed-term employment contract par kaam karne wale employees contract expiry ya completion par pro-rata gratuity ke entitled hain — chahe service period 5 saal se kam ho.
Yeh 2020 Code November 21, 2025 se in force hai.
"Fixed-Term Employee" Kya Hota Hai — Definition
IR Code 2020 mein fixed-term employment define kiya gaya hai — ek employee jo written contract ke basis par specific time period ke liye hire kiya jaata hai. Yeh contract employee se alag hai:
- Fixed-term employee: Written contract, specific duration (e.g. 2 years), at end of term gratuity entitled
- Contract labour (contractor ke through): Alag framework — contractor ki zimmedari mainly
- Regular employee: Permanent employment, normal 5-year gratuity rule
Agar aapka appointment letter ek specific term ke liye hai — company ke saath directly — toh aap potentially fixed-term employee hain.
Pro-Rata Gratuity — Calculation Formula
Formula same hai: (Basic + DA) × Service Period (in years) × 15/26
Fixed-term employees ke liye "service period" actual completed days/months/years consider hogi — proportionate.
6 months se zyada service ke liye ek full year count hota hai (Payment of Gratuity Act standard — SS Code bhi similar). So 2 years 7 months = 3 years ke liye counted ho sakta hai. Exact rules rules notification se confirm karo.
Employer Ki Zimmedari — Contract Expiry Par
Fixed-term contract expire hone par employer ko pro-rata gratuity pay karni hogi — same 30-day window jisme payment honi chahiye (otherwise 10% annual interest chalti hai). Employer deliberately contract renew na kare sirf gratuity avoid karne ke liye — yeh payment of gratuity act ka violation ho sakta hai.
State-Level Considerations
Code on SS 2020 central law hai — states ko apne rules notify karne hain. Kuch states ne rules notified kiye hain, kuch ne nahi. Fixed-term gratuity enforcement aapke state ke rules par bhi depend karega.
Agar employer fixed-term contract expiry par gratuity nahi de raha — Labour Commissioner office mein complaint file karo ya Labour Court approach karo. Employment contract aur service records documents save rakho.
Know Your Employee Rights
Ask any question about salary, PF, gratuity, leaves, or workplace rights — get instant answers.
Ask Mulazim AI →