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Under the Act, gratuity is payable at the rate of fifteen days’ wages for every completed year of service or part thereof in excess of six months subject to a monetary ceiling of Rs.3.50 lakh.

In case of employees’ employed in seasonal establishments, gratuity is payable at the rate of seven days’ wages.

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These were the Kerala Industrial Employees ‘Payment of Gratuity Act, 1970 and the West Bengal Employees’ Payment of Gratuity Act, 1971.

The question of having a Central Legislation on the subject was discussed in the Labour Ministers’ Conference held in New Delhi on 24 and 25 August, 1971 as also the Indian Labour Conference held on 22 and 23 October 1971 and general consensus was reached for enacting a Central Legislation on payment of gratuity.

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AMENDMENTS TO THE PAYMENT OF GRATUITY ACT, 19722 The Payment of Gratuity (Amendment) Bill, 2009 as passed by both the Houses of Parliament has amended the definition of ‘employee’ contained in the Payment of Gratuity Act, 1972 for covering teachers in private institutions. (b) replacing the ceiling of twenty month’s wages for payment of gratuity by a monetary ceiling of Rs.50,000/- (c) making it obligatory for the employers to pay simple interest at a specified rate if the gratuity is not paid within 30 days from the date it falls due.

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Therefore, the schools under the control of local bodies were covered under the Act with effect from 8.1.1982 itself.

However, the employees of other educational institutions were facing denial of gratuity as they were not covered under the Act.

The Act has been recently extended to the State of Sikkim w.e.f. The Act provides for payment of gratuity to employees employed in any factory, mine, oilfield, plantation, port, Railway Company and in any shop or establishment employing ten or more workers.

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