Parliament passes Payment of Gratuity (Amendment) Bill

New Delhi : Parliament on Thursday passed The Payment of Gratuity (Amendment) Bill which seeks to empower the government to fix the period of maternity leave and the tax-free gratuity amount with an executive order.

This Bill will empower the government to increase the ceiling of tax-free gratuity amount to Rs 20 lakh from Rs 10 lakh under the Payment of Gratuity Act.

Under the existing Act, the maximum amount of gratuity payable to an employee cannot exceed Rs 10 lakh. But, this Bill removes the existing ceiling and states that the ceiling may be notified by the Central government.

At present, the formal sector workers with five or more years of service are eligible for Rs 10 lakh tax-free gratuity after leaving job or at the time of superannuation. The Payment of Gratuity Act, 1972, provides for payment of gratuity to employees in any establishment, factory, mine, oil field, plantation, port, railways, company, or shop that employs 10 or more workers.

It will also allow the government to fix the period of maternity leave for female employees. The maximum maternity leave under the 1961 Act was changed from 12 weeks to 26 weeks by the Maternity Benefit (Amendment) Act, 2017. The latest Bill removes the reference to 12 weeks and empowers the Central government to notify the maximum maternity leave period.

The Bill got Parliament’s approval after it was passed by the Rajya Sabha through a voice vote. It was passed amid a din by the Lok Sabha on March 15.

Labour Minister Santosh Kumar Gangwar moved The Payment of Gratuity (Amendment) Bill, 2017, which was passed by a voice vote without any discussion.

“I would urge the chair to pass the Bill without discussion,” said Gangwar while moving the Bill.

The Bill will now be sent to President Ram Nath Kovind, whose assent will validate it as a law.

Updated : March 22, 2018, 18:30 IST

IANS