Anonymous
1

Dear Seniors, I am working in a software company and in my company, two employees have resigned and left the company and my company has to pay them gratuity and I am not aware of the process of it. Kindly let me know the complete process of it.
Thank You

From India, Patiala

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saswatabanerjee
2289

Procedure for payment of gratuity is simple. You need to compute the gratuity and pay to them. Get the basic documentation done so that you do not have problems later. Note gratuity is not payable unless they have worked for 5 years.

PROCEDURE FOR PAYMENT OF GRATUITY
1. The employee shall make an application in Form I to the employer within 30 days from the date on which it becomes payable either by personal service on the employer or by the registered post with acknowledgement due (Section 7 r/w Rule 7)

2. The employer shall calculate the gratuity in the manner stated as prescribed under the Act, as soon as the gratuity becomes payable whether or not an application is made (Section 7)

3. The employer thereafter shall give the notice in Form L within 15 days of receipt of the application to the employee, or his nominee or his Legal heir under a copy the controlling authority. Such notice be served either by personal service against receipt or by registered post with acknowledgment due (Section 7 r/w Rule 8)

4. If the gratuity is not payable, the employer shall give the notice in Form M, to the employee or his nominee or his legal heir with the reason for the same under a copy to the controlling Authority

5. If the amount is payable, the employer shall arrange to pay the gratuity within 30 days from the date it becomes payable

Gratuity is computed as : Monthly Basic+DA /26 X 15 X number of years of completed service

From India, Mumbai
Anonymous
1

Thank you for your prompt reply but still there are some confusions like:
Who is the controlling authority ?
Do we need to register our company with that controlling authority first? if yes then what is the process for that ?
Where can I get Gratuity Forms ?

Thank You

From India, Patiala
saswatabanerjee
2289

Who is the controlling authority ?

You need to go and check on the local govt website. Mostly it will be the Chief Labour Commissioner of your district. Do a google search for authority under gratuity act and you should get it. Otherwise, the Labour Commissioner's office will have the info.

Do we need to register our company with that controlling authority first? if yes then what is the process for that ?

You are required to do it within 30 days from opening of the office / factory / shop. If you fail to do it, it does not matter and you are not exempt from gratuity nor are you prevented from submitting documents to the department on that account. There is a Form A that you need to fill and give to the Controlling Authority.

Where can I get Gratuity Forms ?
The forms are in the gratuity act (you can find on google). Just put the form in word / Excel, fill and take a print and have it signed by the concerned parties.

From India, Mumbai
prashant.deshpande
10

Dear Member,

The learned member has explained in a very well manner! Thank You sir.

You can also opt LIC's P& GS Scheme ( Pension & Gratuity Scheme ) for that you can visit to LIC office for further details. In that case if your employee left the services you can pay his/her gratuity ( if applicable ) in full and final settlement and you can make an application to LIC for the gratuity amount you paid to left employee. After scrutiny of your application LIC paid the same amount to you. Please read and refer scheme documents from LIC before you proceed.

Thank You.

From India, Pune

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