Gratuity Payout After COVID-19 Loss: Should It Cover Work Period or Until Retirement?

Gratuity Payout Query

This query is for gratuity payout. We are a small company with 40 employees. We have gratuity provisions for our employees, but we are not covered by a gratuity insurance company. We lost an employee due to COVID. He had completed 2.6 years with the company. How is the gratuity calculated? Is the gratuity to be paid until the date of working or until retirement?

Gratuity should be paid until the date of his death, not until the date of his retirement.

Regards

It would be advisable for you to consider opting for a special Gratuity Insurance policy with LIC, which includes life cover by paying an additional premium. This policy will cover the gratuity amount payable upon retirement, even if the insured employee passes away before reaching retirement.