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

constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. Attribution: http://www.citehr.com/155230-gratuity-act.html#ixzz21SJKO7UZ

Maximumum limit : 3,50,000/Eligibility: Minimum 5 yrs & every year he had to worked 240 days and above. 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 to Rs 10 lakh. The Bill to amend the Act will now go to Parliament, a government official told FE. Every salaried person, who has completed five years of government or private sector service, is eligible for half a month's salary as gratuity for every completed year of service. But the gratuity pay of those with higher salaries is now limited at Rs 3.5 lakh. The proposed amendment raises this to Rs 10 lakh. Every employer with more than ten salaried workers is mandated to provide gratuity to the eligible employees. Many companies, however, do not keep the gratuity liability adequately funded. That is, they make provisions for future payment, but do not set aside funds towards the future payment. Listed companies are expected to disclose their gratuity liability. Meanwhile, 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. The proposal, earlier approved by the FIPB, will result in FDI exceeding Rs 750 crore. 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. Attribution: http://www.citehr.com/237503-payment-gratuity-act-amendments2010-a.html#ixzz21SM2M4vd

Gratuity Amount payable under Payment of Gratuity Act enhanced from Rs.3.5 lakhs to Rs 10 lakhs

Payment Of Gratuity Act, 1972 The Act provides for the payment of gratuity to workers employed in every factory, 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. All the employees irrespective of status or salary are entitled to the payment of gratuity on completion of 5 years of service. In case of death or disablement there is no minimum eligibility period. The amount of gratuity payable shall be at the rate of 17 days wages based on the rate of wages last drawn, for every completed year of service. The maximum amount of gratuity payable is Rs. 3,50,000/-

Nomination

Each employee is required to nominate one or more member of his family, as defined in the Act, who will receive the gratuity in the event of the death of the employee.
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.
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 employer shall also provide to pay the amount of gratuity to the person to whom it is payable. Failure to do so shall render him liable to pay the interest at the prevailing rate from time taken. In case the employee is not paid the due amount of gratuity he should apply, ordinarily within thirty days, in Form-I to the employer. Is an employer fails to pay due gratuity even after the receipt of notice in Form-1, the claimant employee or his nominee or legal heir, may within ninety days of the occurrence of the case for the application, should apply in Form-IV, to the Controlling Authority for issuing direction to the employer. After conducting the enquiry as prescribed, the Controlling Authority will determine the amount payable and direct the employer to make the payment. 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.
PENALTY

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. 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. 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 news letters

I relinquished my services with an MNC catering company in the month of February'12 after 7 years. When I had requested for Gratuity payment ,the HR dept informed that it is under process and shall be done but the same has not been settled till now. Now after these many months , they reply me saying " Wehave been told by the authorities that they have stopped issuing cheques towards claim settlements, as per the recent directives of RBI. Instead, now it is mandatory for member establishments, such as ours, to open an account in the following name, in which the claim settlement amount would be credited by the trust. The account should be in the name of " XXXXXX Hospitality Services Pvt. Ltd., Employees Group Gratuity Scheme/Fund". We would also require a cancellation cheque & a bank statement of the above account, to be submitted to P&Gs Office of LIC, towards realization of our gratuity claims. "

Attribution: http://www.citehr.com/420980-gratuity.html#ixzz21SbeHHSF