What is Gratuity?: „Gratuity‟ is a retrial benefit.

This act envisages in providing a retirement benefit to the workman who have rendered long and unblemished service to the employer. Gratuity is a reward for long and meritorious service. Applicability of the Act: Every factory, mine, oilfield, plantation, port, railways, company, shop, establishment or educational institutions employing ten or more employees. When is Gratuity Payable? Gratuity shall be payable to an “employee” on the termination of his employment after he has rendered continuous service for not less than five years. a. On his superannuation. b. On his retirement or resignation. c. On his death or disablement due to accident or disease. NOTE: However, the condition of five years of continuous service is not necessary if service is terminated due to death or disablement. To whom is Gratuity Payable? Gratuity is normally payable to the employee himself, however in the case of death of the employee it shall be paid to his nominee & nomination has been made to his heirs. Incase the nominee is a minor; share of the minor shall be deposited with the controlling authority who shall invest the same for benefit of the minor, until he/she attains majority. Amount of Gratuity Payable – Method of Calculation: In case of non –seasonal establishment: Gratuity Payable = 15 days wages x No of completed years of service, In case of seasonal establishment: Gratuity Payable= 7 days wages x No of seasons for which employed. Maximum Limit of Gratuity The government through an ordinance has enhanced the maximum limit of the amount of gratuity payable under the Act is Rs 100,000 to Rs 2,50,000 with effect from 02-04-97.Now at present the maximum limit is 3.5 lacks. Forfeiture of gratuity: The gratuity of an employee whose service have been terminated for any Act of willful omission or negligence causing any damage or loss to or destruction of property belonging to the employer, gratuity shall be forfeited to the extent of the damage or loss caused. The right of forfeiture is limited to the extent of damage. The gratuity payable to an employee shall be wholly forfeited: 1. If the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or 2. If the service of such employee have been terminated for any act which

5 lakhs to Rs 10 lakhs . who has completed five years of government or private sector service.constitutes an offence involving moral turpitude.html#ixzz21SJKO7UZ Maximumum limit : 3.citehr. The proposal.com/155230-gratuity-act. Listed companies are expected to disclose their gratuity liability. do not keep the gratuity liability adequately funded.50.3. however. The Bill to amend the Act will now go to Parliament. but do not set aside funds towards the future payment.000/Eligibility: Minimum 5 yrs & every year he had to worked 240 days and above. Meanwhile. Every salaried person. That is. provided that such offence is committed by him in the course of his employment. they make provisions for future payment. The proposed amendment raises this to Rs 10 lakh. The Cabinet approved the proposal of the shipping ministry to declare Andaman and Nicobar set of ports as major port and establish the Andaman and Nicobar Port Trust with its headquarters at Port Blair. the Cabinet Committee on Economic Affairs (CCEA) approved a proposal of India Infrastructure Development Fund Ltd (Mauritius) to raise contributions from international investors and invest in the India Infrastructure Development Fund. will result in FDI exceeding Rs 750 crore.citehr. is eligible for half a month's salary as gratuity for every completed year of service. Attribution: http://www. Calculation : =Last drawn Basic + DA*15*No Of yrs of Service / 26 PAYMENT OF GRATUITY ACT – AMENDMENTS 2010 The Cabinet on Thursday approved an amendment to the Gratuity Act to raise the ceiling from Rs 3.5 lakh. a government official told FE. earlier approved by the FIPB. Every employer with more than ten salaried workers is mandated to provide gratuity to the eligible employees.html#ixzz21SM2M4vd Gratuity Amount payable under Payment of Gratuity Act enhanced from Rs. But the gratuity pay of those with higher salaries is now limited at Rs 3.5 lakh to Rs 10 lakh. Attribution: http://www.com/237503-payment-gratuity-act-amendments2010-a. Many companies.

Is an employer fails to pay due gratuity even after the receipt of notice in Form-1. RESPONSIBILITY OF THE EMPLOYEERS It is the duty of the employer to determine the amount of gratuity as soon as it becomes payable and to give notice of the same to the person to whom gratuity is payable and also to the Controlling Authority. the claimant employee or his nominee or legal heir. 3. Failure to do so shall render him liable to pay the interest at the prevailing rate from time taken. The maximum amount of gratuity payable is Rs. The employer shall also provide to pay the amount of gratuity to the person to whom it is payable. may within ninety days of the occurrence of the case for the application.Payment Of Gratuity Act. After conducting the enquiry as prescribed. for every completed year of service. All the employees irrespective of status or salary are entitled to the payment of gratuity on completion of 5 years of service. The amount of gratuity payable shall be at the rate of 17 days wages based on the rate of wages last drawn. If the employer fails to comply with the direction the Controlling Authority can direct the Collector to recover the amount due and pay to the applicant. in Form-I to the employer. ordinarily within thirty days. to the Controlling Authority for issuing direction to the employer. 1972 The Act provides for the payment of gratuity to workers employed in every factory.000/- Nomination Each employee is required to nominate one or more member of his family. shop & establishments or educational institution employing 10 or more persons on any day of the proceeding 12 months. A shop or establishment to which the Act has become applicable shall continue to be governed by the Act even if the number of persons employed falls bellow 10 at any subsequent stage. as defined in the Act. the Controlling Authority will determine the amount payable and direct the employer to make the payment. should apply in Form-IV. who will receive the gratuity in the event of the death of the employee. In case the employee is not paid the due amount of gratuity he should apply. PENALTY . ADMINISTRATIVE MACHINERY All the Assistant Labour Commissioners and Labour Officers in the Labour Department have been appointed Controlling Authority and all the Deputy Labour Commissioners have been appointed Appellate Authority under the Act. In case of death or disablement there is no minimum eligibility period.50.

An employer who contravenes any provisions of the Act shall be liable for imprisonment for a term of not less than three months but which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees or with both. in which the claim settlement amount would be credited by the trust.The Act provides that whoever makes false statement for the purpose of avoiding any payment shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to ten thousand rupees or with both. now it is mandatory for member establishments. We would also require a cancellation cheque & a bank statement of the above account. Instead. to be submitted to P&Gs Office of LIC. Now after these many months . they reply me saying " Wehave been told by the authorities that they have stopped issuing cheques towards claim settlements. Ltd.html#ixzz21SbeHHSF . Where the offence relates to non-payment of gratuity the employer can be punished with imprisonment for a term which is not less than six months.citehr.com/420980-gratuity. CiteHR news letters I relinquished my services with an MNC catering company in the month of February'12 after 7 years. as per the recent directives of RBI.the HR dept informed that it is under process and shall be done but the same has not been settled till now.. Employees Group Gratuity Scheme/Fund". When I had requested for Gratuity payment . The account should be in the name of " XXXXXX Hospitality Services Pvt. such as ours. to open an account in the following name. towards realization of our gratuity claims. " Attribution: http://www.