Gratuity Eligibility After 5 Years: Which Form Do I Need to Use for Enrollment?

Our employees have completed 5 years in our company, and as per the rules, they are eligible for gratuity. Please guide me on which form I should use to enroll them in the Gratuity Scheme.

Guidance on Gratuity Nomination Form

If your unit is covered under the Payment of Gratuity Act, 1972, then the employees, at the time of completion of one year of continuous service, are required to submit the nomination form in duplicate (Form F) to the management. The management shall verify the particulars filled by the employee and return the duplicate copy of the same to the employee concerned, duly attested by the employer.

Regards,
R.N. Khola

Please clarify in the Gratuity Act whether the nomination form is collected from the employee after one year of service is completed or at the time of joining. Which one is correct?

Thanks,
Hekarthi

In the case of the death of an employee, the gratuity payable to him shall be paid to his nominee(s). If no nominee has been made, then the gratuity is to be paid to his legal heir(s). The requirement of nomination is necessary in the event of an employee's death after completing one year of continuous service or more. If no nomination is made, then the gratuity amount is required to be paid to his legal heir(s), and obtaining this legal heir certificate can be a challenging task. An employee cannot be compelled to give a declaration. Generally, the HR department also collects this nomination at the time of completing other nominations when a new employee joins.

Regards,
R N KHOLA

Understanding the Gratuity Act

Please read the Gratuity Act. You will realize there is no question of enrollment. You are required to pay gratuity when the employee leaves after having worked for 5 years without a service break (or in case of death, then the 5-year rule does not apply). You should get a gratuity cover from LIC or another insurance company or create a gratuity fund so that it does not impact the cash flow when you have to pay it.