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Gratuity Eligibility May Reduce to One Year Under New Labour Codes
New labour codes may lower gratuity eligibility to one year, expand coverage, and ensure payouts in death cases even with shorter service.
The new labour codes propose reducing gratuity eligibility from five years to one year for many private sector and fixed-term employees. The draft rules also expand coverage to contract and gig workers. If an employee dies, gratuity must be paid to the legal nominee or dependents even if tenure is under a year. These changes increase long-term benefits but may raise employer liability.