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