The indian government’s
new labour codes, effective
November 21, 2025, are bringing
major reforms to gratuity, provident fund (PF), and employee benefits. Here’s a breakdown of what has changed and who benefits the most.
1️⃣ Gratuity Now After Just 1 Year of Service
· Earlier, employees were eligible for gratuity only after
5 years of continuous service.·
New rule: Even employees completing
1 year of service can now claim gratuity.· This benefits
short-term or contract workers and ensures faster access to earned benefits.
2️⃣ Provident Fund (PF) Contribution Changes
· Employer and employee contributions to PF accounts remain, but new codes allow
flexibility in withdrawal rules for emergencies.· Certain categories of workers, especially in small firms or temporary jobs,
gain faster access to funds without waiting for full tenure.
3️⃣ Who Will Benefit the Most?
·
Short-term employees – contract workers and those changing jobs frequently·
Young professionals – who may leave a company within a few years·
Women re-entering workforce – can claim gratuity even if tenure is under 5 years·
Workers in small-scale industries – previously, many could not access benefits early
4️⃣ Other Key Labour Code Reforms
· Simplified compliance for
employers, reducing paperwork.· Strengthened
social security coverage for all employees, including unorganized sector workers.· Enhanced clarity on
termination benefits, PF, and gratuity calculations.
5️⃣ Tips for Employees
· Check your
employment contract to see how new rules apply.· Maintain updated records of
PF contributions and salary slips.· Ask your HR about
gratuity eligibility under the new code.· Plan your
financial and retirement goals based on faster access to benefits.
✅ Takeaway
The new labour codes
make social security more accessible, particularly for short-term, contract, and young employees. Early gratuity and flexible PF withdrawals are
major wins for workers, while businesses benefit from
simplified compliance rules.
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