Context:

• The Lok Sabha passed a bill that seeks to increase the maximum limit of gratuity of employees in the private and public sector from the present Rs 10 lakh to Rs 20 lakh.

Highlights of the Bill:

• The bill seeks to increase the maximum limit of gratuity of employees who are not covered under Central Civil Service (Pension) Rules, at par with the central government employees.
• Before implementation of 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs 10 lakh but it was doubled to Rs 20 lakhs from January 1, 2016.
• The bill empowers the Central Government to notify the proposed ceiling so that the limit can be revised from time to time keeping in view the increase in wage and inflation, and future Pay Commissions without having to amend the Act.
• It also seeks to amend Section 2A of the Act so as to empower the government to notify the period of maternity leave in case of female employee as deemed to be in continuous service in place of existing twelve weeks.

The Payment of Gratuity Act, 1972

• The Payment of Gratuity Act, 1972 was enacted to provide for a scheme for the payment of gratuity to employees who have rendered a minimum five years of continuous service with an establishment employing ten or more persons.

Source:PRS India