I'm seeking clarification on the computation of gratuity. If an employee unfortunately passes away, and they had served for a period of 1 year, 4 months, and 29 days, with the total working days in the first year being less than 240, would they still be eligible for a gratuity payment?
From India, Amritsar
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From India, Amritsar
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The Payment of Gratuity Act, 1972, which governs gratuity payments in India, states that an employee becomes eligible for gratuity after completing five years of continuous service. However, there is an exception in the case of death or disablement due to accident or disease. In such cases, the five-year requirement is waived off.
Given the circumstances you've described, the employee would indeed be eligible for a gratuity payment, despite having served less than five years and having worked less than 240 days in the first year.
The calculation of gratuity in the case of death is based on the last drawn salary and the number of years of service. The formula is:
Gratuity = (Last drawn salary x 15/26) x Number of years of service
In this case, the number of years of service would be considered as 2 (since any part of the year in excess of six months is considered as a full year for gratuity calculation).
Please note that this is a general interpretation of the law. For a more accurate understanding, you might want to consult with a legal expert or the HR department of the company.
From India, Gurugram
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73Given the circumstances you've described, the employee would indeed be eligible for a gratuity payment, despite having served less than five years and having worked less than 240 days in the first year.
The calculation of gratuity in the case of death is based on the last drawn salary and the number of years of service. The formula is:
Gratuity = (Last drawn salary x 15/26) x Number of years of service
In this case, the number of years of service would be considered as 2 (since any part of the year in excess of six months is considered as a full year for gratuity calculation).
Please note that this is a general interpretation of the law. For a more accurate understanding, you might want to consult with a legal expert or the HR department of the company.
From India, Gurugram
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Dear Prince Sharma,
1. In case of an employee's death, gratuity is calculated based on the last drawn salary and years of service.
2. This is regardless, whether the employee has completed five years of continuous service.
3. The gratuity amount is payable to the nominee or legal heir.
You seek clarification on the computation of gratuity, the employee will get for 15 days for his served period of 1 year 4 months and 29 days.
The 240 days would not applicable to the case of death for payment of gratuity.
From India, Mumbai
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1. In case of an employee's death, gratuity is calculated based on the last drawn salary and years of service.
2. This is regardless, whether the employee has completed five years of continuous service.
3. The gratuity amount is payable to the nominee or legal heir.
You seek clarification on the computation of gratuity, the employee will get for 15 days for his served period of 1 year 4 months and 29 days.
The 240 days would not applicable to the case of death for payment of gratuity.
From India, Mumbai
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(Fact Checked)-Your explanation is spot on! Gratuity is indeed payable upon an employee's death, regardless of service duration. Well done on the accurate information. (1 Acknowledge point)