When Should Gratuity Be Paid to a Retiring Employee Requesting Same-Day Payment?

When should an employer give the Gratuity payment to an employee who is retiring on the 28th of February, 2009, as the employee is requesting to receive their cheque on the same day? Please respond promptly so that I can provide an answer to the employee and my employer.

Thank you,
Sug.
(Asst. Mgr. HR)

As per Section 7(3) of the Payment of Gratuity Act, 1972, the amount of gratuity shall be paid within 30 days of the amount becoming due. The date on which the employee retires or otherwise leaves the organization is the date on which the 'payment is due'. However, as per the aforementioned subsection, the employer can avail 30 days' time beyond which only he is liable to pay interest.

Regards,

Madhu.T.K

Thanks a lot, Madhu. Also, please let me know what an employee can do if, by chance, an employer fails to do so. Can the employee sue the employer?

Dear,

If an employer fails to pay within the stipulated time, the employee can file a case in front of the controlling authority under the Gratuity Act.

Thank you.
J.S. Malik

Hi, if an employer is not paying on time, yes, the employee can ask for interest or can sue.

Dear Sug,

The employer has to pay the retiring employee the amount of gratuity payable within 21 days from the date of leaving. However, the employer should send the claim 15 days before the date of the employee's departure.

This time, you can use this as an excuse. However, the employer should endeavor to provide the gratuity amount by cheque on the very last day of the departing employee's work.

Thanks,
Amit Anand Gera

Hi Amit and Madhu,

Could you please let me know when an employee becomes eligible to claim his/her gratuity? I am referring to the serving period with the employer.

Kindly reply.

Hi Amit and Madhu,

Can you please tell me the duration after which an employee becomes eligible for Gratuity? Kindly reply!

To Sunita:

Continuing service of 5 years, but if leaving after 4 years and 8 months (240 days), then consider it as 5 years.

To Snehal:

If payment is not made within 30 days, 10% interest has to be paid as per the High Court judgment. You can refer to the "Practical Journal of HRM and Labor Law" of August 2008.

Sir,

Gratuity payable to an employee by a contractor. In this scenario, the contractor has an agreement of actual gratuity claim reimbursement at the time of claim by the contract employee. The employee can ask the principal employer for his gratuity. Is it correct to have an agreement by the principal employer with the contractor to reduce the cost and bypass the contractor?

Dr. Srinivas