Fixed-term employees can get gratuity after one year under the new labour code
25 October 2026 · 2 min read · HireHo
Based on KPMG India's labour codes explainer (December 2025). Summarised in our own words.
1 yearservice for gratuity for fixed-term employees
Gratuity is a lump sum an employer pays when an employee leaves after long service. Earlier, the usual condition was five years. KPMG's explainer says that under the new codes, fixed-term employees get gratuity after one year of service.
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Who is a fixed-term employee?
Someone hired for a defined period through a written contract, rather than until retirement. Many contract-based warehouse, retail and factory jobs are like this.
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What to do
- Check your contract dates and keep a copy.
- If you complete a year, ask HR in writing how your gratuity will be calculated.
- Final state rules may still change details; check official sources.
SourcesKPMG India: Implementation of Labour Codes, what changes and road aheadHireHo explains these reports in its own words. Figures belong to the sources above.
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