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The new four labour laws reduce FTE gratuity eligibility to one year, extend social security and health benefits.
News18
In a major relaxation to fixed-term employees (FTE), the government has decreased the minimum continuous service requirement from five-year to one-year for gratuity eligibility under new codified four labour laws.
Fixed-term employees are workers hired for a specific period or project, with a clear start and end date mentioned in their contract. Their employment automatically ends when the term expires, unless the employer renews the contract.
Earlier the minimum continuous service requirement for gratuity eligibility was not less than five years. “Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,” according to section 4 of Payment of Gratuity Act, 1972.
Gratuity is a lump-sum payment that an employer gives to an employee as a reward for long-term service when they leave the job, retire, or complete their contract.
New four labour laws, which were consolidation of earlier existing 29 ones, are aimed at ensuring better wages, wider social security coverage and improved health-related protections for workers across sectors.
According to Union Labour Ministry, principal employer will provide health benefits and social security benefits to contractual workers. It also has a provision of providing workers free annual health check-up.
Due to a long period of eligibility, employees usually quit or leave the contract before five-years. So, they won’t get the gratuity of their work.
As per new labour laws, they are entitled to most benefits like permanent employees, such as working hours, wages, and leave.
For the first time, the labour codes formally define gig work, platform work and aggregators, giving legal clarity to millions working with digital platforms. Aggregator companies will now be required to contribute 1-2% of their annual turnover to a dedicated Welfare Fund, capped at 5% of the total payments made to workers. This fund will support social security benefits.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
November 22, 2025, 10:52 IST
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