Understanding Gratuity Eligibility When an Employee Passes Away: What Should Families Know?

Eligibility for Gratuity in Case of Death

In the event of a death, the eligibility criteria for gratuity typically depend on the specific policies and regulations of the organization. Generally, gratuity is a sum of money paid by an employer to an employee in recognition of their long and meritorious service upon retirement, resignation, or death.

In the case of an employee's death, the gratuity amount and eligibility may vary based on factors such as the length of service, employment contract terms, and any applicable laws or company policies. It is advisable to refer to the organization's HR department or relevant guidelines for detailed information on gratuity eligibility in such circumstances.

Gratuity Calculation

Gratuity = Last Drawn Wages (Basic + DA) * Number of years worked * 15 / 26

Gratuity in Case of Employee Death

In the case of the death of an employee, the completion of a minimum of 5 years of continuous service is not necessary.

Regards,

In the case of the death of an employee, completion of a minimum of 5 years of continuous service is not necessary, but a minimum of 240 days of continuous service is necessary.

It depends on the group gratuity policy you have taken from the insurance institutions. Generally, there is a separate life cover as well, apart from the regular gratuity coverage paid at the time of separation from the establishment.

Regards,
Kamal

There is also a concept called future service gratuity that is beneficial to employees. In case of an unfortunate event, the nominee of the employee is entitled to the entire amount of gratuity the deceased employee would have received had they worked until retirement in the company. This makes it a better option compared to other normal gratuity schemes.

Regards,
Prateek Singhal

Gratuity Eligibility in Case of Employee Death

An employee served continuous service for 4 years. In the fifth year, he served for 15 days, then fell seriously ill, could not continue duty, and later died within 50 days of the 5th year. Will he be eligible for gratuity? If yes, what amount if his basic is Rs. 7000?

Eligibility for Gratuity in Case of Death

Please refer to Sec. 4 of the Payment of Gratuity Act, which states that completion of continuous service of five years shall not be necessary if the termination is due to death or disablement.

Regards

If the basic salary is Rs. 7000/-, his nominee will receive an amount of Rs. 16,154/- for four years of service. In the case of death, no minimum service is required to avail of the gratuity benefit.

Regards,
N. Lokanadha Babu
Manager-HR

Clarification on Minimum Service Requirement for Gratuity in Death Cases

It is not correct to say that minimum service is not applicable for death cases. One year's continuous service is mandatory.

Regards,
Varghese Mathew