Payment Of Gratuity Act, 1972

Payment Of Gratuity Act, 1972

The Act is applicable, to factories, mines, oil fields, plantations, ports, railways, motor transport undertakings, companies, and to shops and other establishments, Employing 10 or more workmen. The Act provides for payment of gratuity at the rate of 15 days wages for each completed year of service subject to a maximum of Rs. 10 lakh. In the case of seasonal establishment, gratuity is payable at the rate of seven days wages for each season. The Act does not affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. Central Government is the Appropriate Government in relation to an establishment belonging to or under the control of the Central Government or having branches in more than state or an establishment of a factory belonging to or under the control of Central Government or of a major port, oilfield railway or mine.

  • Applicability
  • Every factory as define in factories Act
    Every shop or commercial establishment in which 10 or more persons are employed
    Gratuity is payable on the basis of last drawn salary

  • Requirements
  • Notice of opening need to be submitted
    Nomination form need to be obtained
    It is advisable to have gratuity policy
    Abstract and other notices need to be displayed on the notice board

  • Consequences
  • Payment of gratuity to employees is compulsory, employee can apply / appeal to authorities
    Provisions of imprisonment and fine are in the enactment

Services We Offer

  • Providing guidance regarding calculation of Gratuity
  • Providing guidance in maintaining the specific forms under Gratuity Act
  • Assistance in ensuring compliance of various provisions of the act related to disclosures, notices, displays, etc.
  • Attend the government officials and solve the queries

Central & State Specific Labour Laws & Rules

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