By IndiaHub 
Kriti Kaushik, Partner, Shardul Amarchand Mangaldas & Co., says that eligibility for payment of gratuity for regular / permanent employees continues to be 5 years of continuous service.
The exception to the 5 years minimum service rule now includes expiry of a fixed-term employment in addition to termination of employment on account of death and disability.
According to Kaushik, the 50% rule under the new “wages” definition requires that any excluded allowances in excess of 50% of the total remuneration is ploughed back to the “wages” for calculation of statutory benefits.
Accordingly, while for a regular / permanent employee, gratuity will be payable only on completion of 5 years of continuous service; for fixed-term employees, gratuity will be payable on a pro-rata basis even if the contract expires before 5 years.