Gratuity Discrepancy: How Can I Claim the Full Amount and Interest from My Former Employer?

My previous employer has paid me less gratuity than due. Also, they delayed my gratuity by 7 months and should have paid me 5% interest on the same as per the Gratuity Act.

Seeking Advice on Gratuity Discrepancy

How can I get the difference from them?

How can you say that they have paid you less gratuity than your entitlement? Please provide us with a figure or reasoning as to how they have paid you less. If you are certain that they have paid you less, please contact your nearest labor commissioner as they are the authority under the Gratuity Act and will assist you in obtaining your rightful amount.

My previous employer has paid me less gratuity than due. Also, they delayed my gratuity by 7 months and should have paid me 5% interest on the same as per the Gratuity Act.

Seeking Advice on Gratuity Discrepancy

How can I get the difference from them?

Please check and evaluate the amount of gratuity being paid to you before approaching the Labor Commissioner's office. If they have delayed and not paid within 30 days from the day it becomes payable, then as section 7(3a) of the Gratuity Act states, you are eligible for 12% S.I per annum. Check whether they have deducted any sum on unethical grounds - refer to section 4(6a) of the Gratuity Act.

Thank you, Mr. Tyagi and Mr. Mukherjee. The lower amount is due to the following reasons:

- I worked there for 7.2 years, but they are calculating for only 7 years.
- They have delayed the payment by 6 months and are not adding the interest.

In these circumstances, is there anything I can do?

Dear IW,

As far as the calculation part is concerned, they have calculated correctly. Any period less than 6 months is not considered for the calculation of gratuity, and any period above 6 months is considered a full year.

Regarding the interest part, yes, they should have given you interest for the late payment of the gratuity amount. You can claim the same by going to the Local Labour Commissioner's Office if they deny it to you.

Regards.

Gratuity Payment Guidelines

Gratuity is payable for each year of completed service and any part thereof. For the purpose of calculation, any period less than 6 months is ignored, and any period in excess of six months is considered a full year. It is payable within 30 days from its due date, failing which interest is payable at the rate prescribed by the Central Government through notification in the Official Gazette. Presently, the rate of interest is 10% per annum.

In the instant case, if the delay in releasing the gratuity was due to the fault of the employer, they will be liable to pay simple interest at 10% on the principal amount from the due date until the date of actual payment. In case they do not pay, lodge a complaint before the concerned ALC & C.A. as per the procedure laid down in the Payment of Gratuity Act to be read with the Rules thereof.