Gratuity and Leave Wages: Do Employers Need to Pay Interest for Delays?

Hi Seniors, kindly rectify the following clarifications:

1. Under the Payment of Gratuity Act, is any interest required to be paid to employees for their gratuity?

2. Regarding leave encashment, is any interest required to be paid to employees for delayed payment of leave wages?

Thanks,
K. Janarthanan

Yes, interest is payable if gratuity is not paid within 30 days from the date it becomes payable. See Section 7(3A) of the Payment of Gratuity Act.

Regards

For the payment of leave encashment and leave salary, there is no provision for the payment of interest. However, the employer should ensure that there is no abnormal delay.

Regards,
SUBBA RAO