srikanth (free) 24 March 2010

GRATUITY DETAILS

WE HAVE TAKEN GROUP GRATUITY POLICY THROUGH LIC FOR OUR STAFFS. WE WANT TO HAVE SOME CLARIFFICATIONS REGARDING THIS.

1. IS GRATUITY IS COMPULSORY FOR ALL COMPANIES.

2. IS RENEWAL OF GRATUITY IS NECESSARY FOR EVERY YEAR.

3. IN GRACE PERIOD OF RENEWAL WHETHER CLAIM CAN BE CLAIMED.

4. IS PART PAYMENT ALLOWED FOR RENEWAL, IF SO UNDER WHAT CONDITION.

5. WHAT IS THE MINIMUM BALANCE AMOUNT SHOULD BE WITH LIC - GROUP GRATUITY\

6. IF AN EMPLOYEE DIES BEFORE OR AFTER 5 YEARS, WHAT AMOUNT OF CLAIM IS ISSUED BY LIC AND UPTO WHICH PERIOD , AND IN WHAT WAY IT IS CALCULATED.

Reply Follow

7 Replies

(Guest)

REPLY:

1.) Gratuity is complsory in all organizations where 10 or more employees are working.
2.) Renewal/contribution is a must every year.
3.) Yes during grace period claims can be settled for eligible employees.
4.) Part payment of the contribution is possible depending upon the Fund value of the policy.
5.) LIC uses Projected Unit Credit Method to calculate the contribution and the fund value. If fund value is less the the required level then it is possible that the gratuity claim will not be settled by the LIC.
6.) Formula to calculate the claim amount -Basic+DA(Last Pay drawn) x 15 days x No. of yrs. of service ÷ 26

Hope your queries are answered.

Kamal Prasoon

Sarjooram Sharma (Assistant Labour commissioner) 24 March 2010

I am agree with Mr. Kamal Prasoon. The employee who has completed 5 years of service is entitled for gratuity. But in case of death there is no such limit.

D.Sathish Kumar (Manager-Accounts/HR) 22 May 2010

Originally posted by :srikanth

WE HAVE TAKEN GROUP GRATUITY POLICY THROUGH LIC FOR OUR STAFFS. WE WANT TO HAVE SOME CLARIFFICATIONS REGARDING THIS.

1. IS GRATUITY IS COMPULSORY FOR ALL COMPANIES.

2. IS RENEWAL OF GRATUITY IS NECESSARY FOR EVERY YEAR.

3. IN GRACE PERIOD OF RENEWAL WHETHER CLAIM CAN BE CLAIMED.

4. IS PART PAYMENT ALLOWED FOR RENEWAL, IF SO UNDER WHAT CONDITION.

5. WHAT IS THE MINIMUM BALANCE AMOUNT SHOULD BE WITH LIC - GROUP GRATUITY\

6. IF AN EMPLOYEE DIES BEFORE OR AFTER 5 YEARS, WHAT AMOUNT OF CLAIM IS ISSUED BY LIC AND UPTO WHICH PERIOD , AND IN WHAT WAY IT IS CALCULATED.

Dear Sir,

1. I NEED A CLARIFICATION ,WE ARE UNDER GROUP GRATUITY SCHEME IN CASE, WE ARE NOT WILLING TO CONTINUE THE SCHEME OR DUE TO FUND PROBLEM WE ARE NOT ABLE TO PAY THE AMOUNT FOR THE CURRENT YEAR OR WE ARE NOT WILLING TO RUN BUSINESS FURTHER WHAT WAS THE PROCEDURE.WHETHER THE PAID AMOUNT WILL BE REFUNDABLE OR NOT

2.A PERSON WORKED FOR THREE YEARS WE ARE PAYING GRAUTITY FOR THAT EMPLOYEE AFTER THREE YEAR HE RESIGNED ,WHAT WILL HAPPEN TO THE AMOUNT PAID IN HIS NAME.

(Guest)

Dear Sathish,

1.) You can stop Gratuity Scheme in normal circumtances given to the employees. Well in you are planning to stop/close the business itself then there is no question of conituation of a Gratuity Scaheme as the organization itself does not exist.

Legally the paid amount is not refundable.

2.) As per the Gratuity Act an employee can claim his gratuity only after he/she completes his/her job for 5 years, there is no question of any Gratuity claim if an employess leaves a job without completing 5 years.

Thanks
Kamal Prasoon

(Guest)

Dear Sathish, Plz ignore the earlier posting ...there were some typing mistake.

1.) You can not stop Gratuity Scheme in normal circumtances given to the employees. Well in you are planning to stop/close the business itself then there is no question of conituation of a Gratuity Scaheme as the organization itself does not exist.

Legally the paid amount is not refundable.

Thanks
Kamal Prasoon