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.
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.
This Bill empowers the Central government to notify the period of maternity leave eligible for qualifying as continuous service and determine the amount of gratuity available to employees.
The maximum maternity leave, for the purpose of calculating continuous service under the Act, was based on the maternity leave provided under the Maternity Benefit Act, 1961.
The maximum maternity leave under the 1961 Act was changed from 12 weeks to 26 weeks by the Maternity Benefit (Amendment) Act, 2017. The Bill removes the reference to 12 weeks and empowers the Central government to notify the maximum maternity leave.
Under the Act, the maximum amount of gratuity payable to an employee cannot exceed Rs 10 lakh. The Bill removes the existing ceiling and states that the ceiling may be notified by the Central government.
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