Understanding Gratuity Act Compliance and Company Registration: Insights on Employee Benefits

Hi Seniors,

I've recently joined a manufacturing company in Mumbai. The company does not have a gratuity policy, and there are a few employees who have completed 5 years or more, with 3 employees having completed 10+ years and set to retire next year. My query is:

Please let me know whether it's compulsory for all companies to register under the Gratuity Act of 1972 to avail of gratuity, and what the consequences would be if the company is not registered?

Awaiting your valuable feedback.

Thanks and regards,
coolchini

Dear Coolchini,

It is not necessary to frame or have a gratuity policy in the establishment. If the Act is applicable, then we are to implement this. The Payment of Gratuity Act, 1972 does not have any provision that directs us to register the companies under this Act. In compliance with the PG Rules, we are required to intimate the area Controlling Authority within 30 days of the Rules becoming applicable to the establishment in the format as prescribed under the applicable State or Central Rules, as the case may be.

Regards,
R.N.Khola

Hello coolchini :-)

It is essential for the payment of gratuity if your company employs more than 10 employees. After registration, even if the employee number decreases below 10, the governance of the act stays intact. If any company tries to avoid payment of the gratuity by means of infringement, the company could be penalized to the tune of Rs. 10,000 or more along with imprisonment of the concerned authority for a term of 3 months or even more.

Please check out the link: http://www.wiziq.com/tutorial/31412-gratuity-act-1972

*Seniors, please clarify for any recent updates.

Regards, Shreekanth.P.R

Dear seniors,

I recently joined this site. I hope I will get support from all of you. This time, I want to initiate training programmes in our manufacturing unit. Please help me start soft skill training. Can somebody provide me with material on it.

Bal Mohan Sharma
09805005333

According to me, it is compulsory because the Gratuity Act is for their benefit after retirement, and it is established by the government for all.

Dear Member,

Which provision or rules of the Payment of Gratuity Act, 1972 state that we are required to register the establishment compulsorily?

Regards,
R N Khola