My wife has worked for a private limited company for 4 years and 8 months, after which she has been on medical leave (actually maternity, first trimester due to some complications). If she resigns now, will she be eligible for gratuity payment and how much will she receive, considering she finishes 5 years on 1st Jan 2010.
From India, Delhi
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From India, Delhi
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Your wife, having completed 4 years and 8 months, is eligible for gratuity payments. If she avails the maternity leave of 6 weeks as per the law, that leave is also a part of her service. If she resigns after 5 years, as you mentioned, the gratuity will be calculated as follows:
1. Last drawn Basic Plus D.A / 26 days = 1 day wage / salary
2. Per year gratuity = 15 days X 1 day wage / salary
3. Total service, in your case 5 Years X per year gratuity.
For example: Basic + DA = 100
Per day wage = 100 / 26 days = 3.85 per day wage
Gratuity per year = 15 days X 3.85 = 57.75
Gratuity for 5 years = 5 X 57.75 = 288.75
Mohan Rao
Manager HR
From India, Visakhapatnam
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241. Last drawn Basic Plus D.A / 26 days = 1 day wage / salary
2. Per year gratuity = 15 days X 1 day wage / salary
3. Total service, in your case 5 Years X per year gratuity.
For example: Basic + DA = 100
Per day wage = 100 / 26 days = 3.85 per day wage
Gratuity per year = 15 days X 3.85 = 57.75
Gratuity for 5 years = 5 X 57.75 = 288.75
Mohan Rao
Manager HR
From India, Visakhapatnam
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Thank you for your reply.
Does the maternity leave also apply in the first trimester of pregnancy, or is it only applicable for 3 weeks before and after delivery? In this case, can she avail medical and maternity leave both for a period of 4 months, and are these leaves paid?
Will the gratuity be paid automatically in her full and final settlement, or will she have to ask for it?
She has received salary so far for 2 months and has been on leave without pay since.
Thanks - Sandeep
From India, Delhi
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Does the maternity leave also apply in the first trimester of pregnancy, or is it only applicable for 3 weeks before and after delivery? In this case, can she avail medical and maternity leave both for a period of 4 months, and are these leaves paid?
Will the gratuity be paid automatically in her full and final settlement, or will she have to ask for it?
She has received salary so far for 2 months and has been on leave without pay since.
Thanks - Sandeep
From India, Delhi
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Hi,
Maternity leave is applicable only 6 weeks before and 6 weeks after the delivery of a child. For the benefit of gratuity, she needs to apply using a separate form prescribed by the employer after resigning and having 5 years of continuous service with the said employer, or having 4 years and 240 days of service.
If she miscarries or falls ill after delivery, then another 1 month of leave is paid, and thereafter, any leave is without pay.
Mohan Rao Manager HR
From India, Visakhapatnam
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Maternity leave is applicable only 6 weeks before and 6 weeks after the delivery of a child. For the benefit of gratuity, she needs to apply using a separate form prescribed by the employer after resigning and having 5 years of continuous service with the said employer, or having 4 years and 240 days of service.
If she miscarries or falls ill after delivery, then another 1 month of leave is paid, and thereafter, any leave is without pay.
Mohan Rao Manager HR
From India, Visakhapatnam
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Dear Mr. Mohan Rao,
In our company, maternity leave is applicable for 12 weeks. Does it vary from company to company? Can you please provide information about Gratuity - to whom it applies and if it is mandatory in all companies? Additionally, when does an employee become eligible for this benefit?
Awaiting your prompt response.
Regards,
Kalpana
Hyderabad
From India, Eluru
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In our company, maternity leave is applicable for 12 weeks. Does it vary from company to company? Can you please provide information about Gratuity - to whom it applies and if it is mandatory in all companies? Additionally, when does an employee become eligible for this benefit?
Awaiting your prompt response.
Regards,
Kalpana
Hyderabad
From India, Eluru
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Hi Annukalpana,
There was a typical error in figures. 6 months before and 6 weeks after delivery, now corrected. This leave applies to all organizations and establishments.
Gratuity is applicable to all the employees of any organization/establishment when an employee covers a service of 5 years or more. Gratuity is paid at the rate of 15 days' salary/wage per year of service. To arrive at 15 days' wage or salary, the last paid Basic + DA is to be divided by 26 days to arrive at 1 (one) day's wage/salary, and then it has to be multiplied by 15 days to arrive at the per year of Gratuity amount. Hope you are clear.
Mohan Rao Manager HR
From India, Visakhapatnam
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There was a typical error in figures. 6 months before and 6 weeks after delivery, now corrected. This leave applies to all organizations and establishments.
Gratuity is applicable to all the employees of any organization/establishment when an employee covers a service of 5 years or more. Gratuity is paid at the rate of 15 days' salary/wage per year of service. To arrive at 15 days' wage or salary, the last paid Basic + DA is to be divided by 26 days to arrive at 1 (one) day's wage/salary, and then it has to be multiplied by 15 days to arrive at the per year of Gratuity amount. Hope you are clear.
Mohan Rao Manager HR
From India, Visakhapatnam
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Dear Mr. Malhotra,
Gratuity Payable = 15/26 * last drawn wages * no. of years of service. Last drawn wages = basic + DA. Number of years of service = 5 or more years. For example, if your Basic + DA = 5000 (at the time you resign), and you have 7 years of continuous service, then the gratuity payable to you will be:
15/26 * 5000 * 7 = 20192. The maximum ceiling for gratuity is 350,000. I hope you understand the calculations.
Warm regards,
Divya
From India, Ahmadabad
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Gratuity Payable = 15/26 * last drawn wages * no. of years of service. Last drawn wages = basic + DA. Number of years of service = 5 or more years. For example, if your Basic + DA = 5000 (at the time you resign), and you have 7 years of continuous service, then the gratuity payable to you will be:
15/26 * 5000 * 7 = 20192. The maximum ceiling for gratuity is 350,000. I hope you understand the calculations.
Warm regards,
Divya
From India, Ahmadabad
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Hi,
My company does not have D.A. Instead, they are paying a special allowance. Can anybody suggest if the special allowance is included when calculating gratuity? I would be pleased if some notification from the PF commissioner or a court verdict could be attached as support.
From India, Mumbai
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My company does not have D.A. Instead, they are paying a special allowance. Can anybody suggest if the special allowance is included when calculating gratuity? I would be pleased if some notification from the PF commissioner or a court verdict could be attached as support.
From India, Mumbai
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Thank you, Mr. Rao.
Also, if you could clarify - is the one-month period of notice considered as part of service (to calculate 5 years), or should notice of 1 month be served after giving the resignation papers?
Just to confirm, maternity leave is applicable 6 months before and 6 weeks after delivery.
From India, Delhi
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Also, if you could clarify - is the one-month period of notice considered as part of service (to calculate 5 years), or should notice of 1 month be served after giving the resignation papers?
Just to confirm, maternity leave is applicable 6 months before and 6 weeks after delivery.
From India, Delhi
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Mr. Sandesingh,
One month notice period is also calculated in total service. The employee had to work for 1 month notice period, taking it into consideration in total service. Additionally, 1 month notice must be submitted along with the resignation.
Regarding maternity leave with wages as per the MB Act, it is for 6 weeks before and 6 weeks after delivery. In case of a miscarriage or illness, 1 month of leave with wages can be availed with a doctor's certificate.
I hope the information provided is clear.
Mohan Rao
Manager HR
From India, Visakhapatnam
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One month notice period is also calculated in total service. The employee had to work for 1 month notice period, taking it into consideration in total service. Additionally, 1 month notice must be submitted along with the resignation.
Regarding maternity leave with wages as per the MB Act, it is for 6 weeks before and 6 weeks after delivery. In case of a miscarriage or illness, 1 month of leave with wages can be availed with a doctor's certificate.
I hope the information provided is clear.
Mohan Rao
Manager HR
From India, Visakhapatnam
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Dear MR.Krm rao, can a person having 4 yrs and 9 mths service claim gratuity???is it according to the law??? Warm Regards, Divya
From India, Ahmadabad
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From India, Ahmadabad
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Hi, Divia,
As per the Madras High Court judgment, if an employee has completed 4 years and 240 days of service in a single organization, they are eligible for gratuity benefits. In your case, the employee has completed 4 years and approximately 270 days of service, making them eligible to receive the gratuity benefit.
Mohan Rao
Manager HR
From India, Visakhapatnam
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As per the Madras High Court judgment, if an employee has completed 4 years and 240 days of service in a single organization, they are eligible for gratuity benefits. In your case, the employee has completed 4 years and approximately 270 days of service, making them eligible to receive the gratuity benefit.
Mohan Rao
Manager HR
From India, Visakhapatnam
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Hi Sir,
Is this law applicable only in Tamil Nadu? Also, I want to know if the gratuity calculation is the same in the case of a deceased employee. I read this information in another thread.
Gratuity for any death case would be calculated based on the below formula (as per the Gratuity Act):
Gratuity amount = (Number of years of service in the company + Number of service years left till his age of 58) * (15/26 * Last drawn basic)
Is this true?
From India, Ahmadabad
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Is this law applicable only in Tamil Nadu? Also, I want to know if the gratuity calculation is the same in the case of a deceased employee. I read this information in another thread.
Gratuity for any death case would be calculated based on the below formula (as per the Gratuity Act):
Gratuity amount = (Number of years of service in the company + Number of service years left till his age of 58) * (15/26 * Last drawn basic)
Is this true?
From India, Ahmadabad
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Hi Divia,
The Payment of Gratuity Act is applicable throughout India. For a deceased employee, the calculation remains the same; however, the total years of service do not have to be 5. For example, if a deceased employee worked for only 1 year, gratuity still needs to be paid.
In the case of gratuity payment to a deceased individual, only the number of years they served is taken into account for the gratuity payment. The remaining years up to the age of 58 are not considered.
Mohan Rao
Manager HR
From India, Visakhapatnam
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The Payment of Gratuity Act is applicable throughout India. For a deceased employee, the calculation remains the same; however, the total years of service do not have to be 5. For example, if a deceased employee worked for only 1 year, gratuity still needs to be paid.
In the case of gratuity payment to a deceased individual, only the number of years they served is taken into account for the gratuity payment. The remaining years up to the age of 58 are not considered.
Mohan Rao
Manager HR
From India, Visakhapatnam
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Hi,
As per the Payment of Gratuity Act 1972, gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years:
- on his superannuation,
- on his retirement or resignation, or
- on his death or disablement due to accident or disease.
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement. Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs. Where any such nominee or heir is a minor, the share of such minor shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation: For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment. For this purpose, the wages paid for any overtime work shall not be taken into account.
Provided further that in the case of an employee who is employed in a seasonal establishment and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season.
Explanation: In the case of a monthly-rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees.
For the purpose of computing the gratuity payable to an employee who is employed after his disablement on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.
Notwithstanding anything contained in subsection (1), the gratuity of an employee whose services have been terminated for any act, willful omission, or negligence causing any damage or loss to, or destruction of, property belonging to the employer shall be forfeited to the extent of the damage or loss so caused. The gratuity payable to an employee may be wholly or partially forfeited if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or if the services of such employee have been terminated for any act which constitutes an offense involving moral turpitude, provided that such offense is committed by him in the course of his employment.
From India, Delhi
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As per the Payment of Gratuity Act 1972, gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years:
- on his superannuation,
- on his retirement or resignation, or
- on his death or disablement due to accident or disease.
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement. Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs. Where any such nominee or heir is a minor, the share of such minor shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation: For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment. For this purpose, the wages paid for any overtime work shall not be taken into account.
Provided further that in the case of an employee who is employed in a seasonal establishment and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season.
Explanation: In the case of a monthly-rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees.
For the purpose of computing the gratuity payable to an employee who is employed after his disablement on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.
Notwithstanding anything contained in subsection (1), the gratuity of an employee whose services have been terminated for any act, willful omission, or negligence causing any damage or loss to, or destruction of, property belonging to the employer shall be forfeited to the extent of the damage or loss so caused. The gratuity payable to an employee may be wholly or partially forfeited if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or if the services of such employee have been terminated for any act which constitutes an offense involving moral turpitude, provided that such offense is committed by him in the course of his employment.
From India, Delhi
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Gratuity Case Study:
Hi all, please help me with this gratuity of a deceased employee. Rajiv, a 42-year-old, worked in XYZ Ltd from 17/09/1999. He passed away on 31/12/2007. He was drawing a salary (basic + D.A) of Rs. 8800. What is the amount of gratuity his nominee would get?
Cheers,
Divya
From India, Ahmadabad
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Hi all, please help me with this gratuity of a deceased employee. Rajiv, a 42-year-old, worked in XYZ Ltd from 17/09/1999. He passed away on 31/12/2007. He was drawing a salary (basic + D.A) of Rs. 8800. What is the amount of gratuity his nominee would get?
Cheers,
Divya
From India, Ahmadabad
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Hi, Divya.
The expired employee had put in 8 years, 3 months, and 14 days of service. Hence, he would receive gratuity benefits for 8 years only.
The calculation would be as follows: Last drawn basic pay + DA = 8,800 / 26 = 338.46 per day wage x 15 days = 5,076.90 per year gratuity benefit. For 8 years = 8 x 5,076.90 = 40,615.20 total gratuity. Therefore, his nominee would receive a total gratuity of Rs. 40,615.00.
Mohan Rao
Manager HR
From India, Visakhapatnam
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The expired employee had put in 8 years, 3 months, and 14 days of service. Hence, he would receive gratuity benefits for 8 years only.
The calculation would be as follows: Last drawn basic pay + DA = 8,800 / 26 = 338.46 per day wage x 15 days = 5,076.90 per year gratuity benefit. For 8 years = 8 x 5,076.90 = 40,615.20 total gratuity. Therefore, his nominee would receive a total gratuity of Rs. 40,615.00.
Mohan Rao
Manager HR
From India, Visakhapatnam
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Hi Mr. Krm Roa,
Thank you so much. I am really confused about the calculation of gratuity in case of a deceased employee. There are so many different posts on this, and I'm confused as to what to believe. In one post, I read that if the employer is contributing towards EDLI, then the number of years of service remaining till 58 will be taken for gratuity computations in the case of a deceased employee. Is it true?
Cheers,
Divya
From India, Ahmadabad
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Thank you so much. I am really confused about the calculation of gratuity in case of a deceased employee. There are so many different posts on this, and I'm confused as to what to believe. In one post, I read that if the employer is contributing towards EDLI, then the number of years of service remaining till 58 will be taken for gratuity computations in the case of a deceased employee. Is it true?
Cheers,
Divya
From India, Ahmadabad
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