New Labour Laws 2026: Clarified Gratuity Implementation Details
The government has issued new regulations for the implementation of gratuity as part of the New Labor Code 2026, clarifying effective dates and relevant employment categories. Fixed-term employees have also been granted relaxation in their initial provision period, while contract workers are now responsible for paying gratuity after they achieve five years of service.
Highlights
- •Effective implementation date of new gratuity rules has been moved to November 21, 2025
- •Fixed-term employees can now receive gratuity after completing one year of work under a contract
- •Contract workers are required to pay gratuity once they have served for five years
- •Fixed-term and fixed-wage criteria will be revised as per new regulations
New labor codes have addressed a crucial point of confusion surrounding the implementation of gratuity by clarifying effective dates and key regulations. The government has announced that the new gratuity rules will take effect on November 21, 2025.
The Labor Ministry updated FAQs to specify that the retroactive calculation for gratuity is not applicable. Accordingly, employees' final salaries from November 21 onward will be used to calculate their gratuity amounts.
Furthermore, contract workers and fixed-term employees have received new provisions based on recent clarifications. The government now allows fixed-term employees to receive gratuity after a one-year period of service. Additionally, the wage calculation method has changed under the Social Security Code, where gratuity will be calculated using specified wage components instead of allowances.
Fixed-term employees have also benefited from new provisions, such as receiving gratuity when they meet the term of their contract, which was previously limited to five years of service. The government also detailed how allowances affecting 50% or more of a worker's salary will be calculated under the wage system.
