Gratuity Dilemma: Can We Pay an Employee Before They Resign?

One of our employees has completed 5 years and is eligible for gratuity. Kindly let me know if we can give the amount while he is still working with us, or only after his resignation.

Dear Trupti,

As per the Payment of Gratuity Act of 1972, in any establishment with 10 or more employees, gratuity will be applicable. After resignation, termination, expiry, or disablement, employees will be eligible for gratuity. In your case, the employee must have completed a minimum of 5 years in the same organization for you to pay the gratuity amount upon resignation only.

If you have any queries, please refer to the Payment of Gratuity Act 1972.

Regards,
Charvaka Reddy

Hi!

An employee is eligible for gratuity only after their separation from an organization. If you still want to provide the same benefit while they are in service, take their resignation and treat them as a new joiner with a new date of joining. In this scenario, you must provide them with all the benefits as if they had resigned.

Regards,

Asmita Bhalla
9867289880

Please tell us the necessity of providing gratuity while the employee is in service.

As per law, gratuity is paid only on termination of prescribed service of an employee.

Dear Prabhakaran,

It is applicable for temporary employees as well, if they are permanently temporary for up to five years in your organization.

Hi,

Gratuity cannot be paid while an employee is in service. In other words, gratuity becomes payable only after the cessation of service.

Regards,
Ajeet Kumar

Hi,

This is Govind. My brother passed away while working in the organization, but before his death, he took a long leave of nearly 3 months. Now, how can I avail ESIC and PF benefits? What are the benefits that I can claim?

Regards,
Govind

Govind, you can apply for PF payback; however, only the nominee, as mentioned, would be eligible for the same along with ESI.

Dear member,

For ESIC benefits, approach the Manager at the ESIC local office and obtain the necessary claim forms. For PF benefits, you need to obtain Form No. (for PF amount), Form No. 10 D (for pension), and Form 5(IF) for EDLI benefits. For gratuity, please speak with your employer.

Regards,

Baba Naresh

For calculation of gratuity amount, we are to consider only the last drawn rate of monthly basic wage and DA only.