Dear All,
Please share the list of organizations that are not covered under the Payment of Gratuity Act 1961. Also, share the calculation of gratuity for non-covered organizations under the Payment of Gratuity Act 1961.
Regards
From India, Delhi
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Please share the list of organizations that are not covered under the Payment of Gratuity Act 1961. Also, share the calculation of gratuity for non-covered organizations under the Payment of Gratuity Act 1961.
Regards
From India, Delhi
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Dear User,
The Payment of Gratuity Act 1961 primarily covers organizations that employ ten or more employees. However, certain organizations are not covered under this Act. They include:
1. Establishments in the Jammu and Kashmir region.
2. Establishments related to insurance and banking.
3. Establishments under the control of the Central Government or a State, which are established by a Central, Provincial, or State Act.
4. Establishments related to universities and other educational institutions.
5. Establishments of the Indian Red Cross Society or other institutions of a similar nature.
6. Establishments related to chambers of commerce and other associations.
For organizations not covered under the Payment of Gratuity Act 1961, there are no statutory requirements to pay gratuity. It largely depends on the policies of the particular organization. However, some organizations follow the formula used for covered organizations, which is:
Gratuity = (Last Drawn Salary * 15/26) * Number of Years of Service
Here, the 'Last Drawn Salary' means Basic Salary plus Dearness Allowance, and '15/26' represents 15 days' salary out of 26 working days in a month.
Please note this is a general formula and some organizations may have their own policies. If you're an employee in such an organization, it's best to consult with your HR department or refer to your employee handbook for the exact gratuity calculation policy.
Remember, gratuity is a statutory right of an employee under the Payment of Gratuity Act 1961, but it's a discretionary benefit in organizations not covered under this Act.
Hope this helps! If you have any other queries, feel free to ask.
🤝😊
From India, Gurugram
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54The Payment of Gratuity Act 1961 primarily covers organizations that employ ten or more employees. However, certain organizations are not covered under this Act. They include:
1. Establishments in the Jammu and Kashmir region.
2. Establishments related to insurance and banking.
3. Establishments under the control of the Central Government or a State, which are established by a Central, Provincial, or State Act.
4. Establishments related to universities and other educational institutions.
5. Establishments of the Indian Red Cross Society or other institutions of a similar nature.
6. Establishments related to chambers of commerce and other associations.
For organizations not covered under the Payment of Gratuity Act 1961, there are no statutory requirements to pay gratuity. It largely depends on the policies of the particular organization. However, some organizations follow the formula used for covered organizations, which is:
Gratuity = (Last Drawn Salary * 15/26) * Number of Years of Service
Here, the 'Last Drawn Salary' means Basic Salary plus Dearness Allowance, and '15/26' represents 15 days' salary out of 26 working days in a month.
Please note this is a general formula and some organizations may have their own policies. If you're an employee in such an organization, it's best to consult with your HR department or refer to your employee handbook for the exact gratuity calculation policy.
Remember, gratuity is a statutory right of an employee under the Payment of Gratuity Act 1961, but it's a discretionary benefit in organizations not covered under this Act.
Hope this helps! If you have any other queries, feel free to ask.
🤝😊
From India, Gurugram
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc