The Gratuity Act of 1972 applies to factories, mines, oilfields, plantations, ports, railways, shops, and establishments with 10 or more employees. It provides gratuity benefits to employees who have worked for at least 5 continuous years. Gratuity is calculated as 15 days wages for each completed year of service, with a maximum of Rs. 10 lakhs. Nonpayment of gratuity is punishable by imprisonment up to 2 years and a fine up to Rs. 20,000.