Gratuity is one of the least understood components of payment. Gratuity is a part of a wage that is received by an employee from his/her employer in gratitude for the services offered by the employee in the company.
Gratuity is a defined benefit plan and is one of the many retirement benefits offered by the employer to the employee. This takes place upon the employee leaving his job. Gratuity is given by the employer to an employee for the services rendered during the period of employment. It is usually paid at the time of retirement but it can be paid before provided certain conditions are met.
An employee may leave his job for various reasons, such as – retirement/superannuation, for a better job elsewhere, on being retrenched or by way of voluntary retirement.
If there are more than 15 workmen at the workplace, the Gratuity Act can be applied. And the workman has to refer to the Labor Commissioner. They can go to Labor Tribunal about forfeiture of gratuity.
If the worker has completed five years or more of service before termination. The employer must pay that worker within a period of 30 days, half a month’s wages or salary for each year of completed service.
The period for claim of gratuity is 6 months
A person is eligible to receive gratuity only if he has completed least five years of service with an organization.
But, it can be paid before the completion of five years at the death of an employee or if he has become disabled due to accident or disease
If the workplace has less than 15 employees, the workmen have to go to Labor Tribunal, if Gratuity is not paid.
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Your gratuity can be forfeited only if you have been terminated for reasons of:
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