Respected all sir, Sir, I want to ask, how the employer can make the provision for gratuity payment, under the Payment of gratuity act?
From India, Pune
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5From India, Pune
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Dear Naresh,
Please refer to sec. 4-A of the PG Act, 1972. In the absence of any approved Gratuity Fund under the IT Act, 1961, every employer whose establishment falls under the purview of the PGA, 1972 should obtain an insurance policy towards his liability for gratuity to his employees as described in the section.
From India, Salem
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Please refer to sec. 4-A of the PG Act, 1972. In the absence of any approved Gratuity Fund under the IT Act, 1961, every employer whose establishment falls under the purview of the PGA, 1972 should obtain an insurance policy towards his liability for gratuity to his employees as described in the section.
From India, Salem
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Dear Umakanthan Sir,
I would like to draw your kind attention to the provision of compulsory insurance under section 4-A, wherein it is written that the employer shall obtain insurance with effect from such date as may be notified by the appropriate government in this regard.
To my knowledge, none of the appropriate governments has notified in this regard as of today.
I may be mistaken regarding the fact or in understanding the section. You may be in a better position to shed light on it. Thanks in advance.
From India, Mumbai
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I would like to draw your kind attention to the provision of compulsory insurance under section 4-A, wherein it is written that the employer shall obtain insurance with effect from such date as may be notified by the appropriate government in this regard.
To my knowledge, none of the appropriate governments has notified in this regard as of today.
I may be mistaken regarding the fact or in understanding the section. You may be in a better position to shed light on it. Thanks in advance.
From India, Mumbai
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What you said is correct, Akhil. To my knowledge, Andhra Pradesh is the only state that has formulated compulsory insurance rules under Section 4-A of the PGA, 1972 so far. However, apart from big industrial groups like Tatas and Birlas, who have constituted their own gratuity funds, many employers subscribe to the LIC Group Gratuity Insurance Scheme.
From India, Salem
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From India, Salem
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Dear Umakanthan Sir,
Greetings on the auspicious day of Ganesh Chaturthi to you as well as all the members on this forum.
I also suggest everyone to go for Group Gratuity Insurance Scheme, irrespective of whether it is compulsory by law or not. I further advise everyone to pay some nominal extra premium and opt for life coverage of employees so that in case of the early death of any employee, his nominee may benefit beyond what is due from Gratuity.
From my post #4 above, I wanted to confirm the provision of compulsory insurance. Here one question comes to my mind: why the government or the governments are not very keen on the social security of employees when there are Insurance Companies willing to provide the insurance. It's a question of one notification.
From India, Mumbai
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Greetings on the auspicious day of Ganesh Chaturthi to you as well as all the members on this forum.
I also suggest everyone to go for Group Gratuity Insurance Scheme, irrespective of whether it is compulsory by law or not. I further advise everyone to pay some nominal extra premium and opt for life coverage of employees so that in case of the early death of any employee, his nominee may benefit beyond what is due from Gratuity.
From my post #4 above, I wanted to confirm the provision of compulsory insurance. Here one question comes to my mind: why the government or the governments are not very keen on the social security of employees when there are Insurance Companies willing to provide the insurance. It's a question of one notification.
From India, Mumbai
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Your doubt, as well as the question, is genuine and reasonable. If I remember correctly, the Kerala High Court once reprimanded the State Govt for their inaction on this issue. Even my search on my home State Govt's website was futile. However, based on my experience, I have noticed that most industrial establishments opt for LIC Gratuity Insurance independently. This may be the reason for such a lackadaisical approach.
From India, Salem
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From India, Salem
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Respected Umakanthan Sir,
Small organizations establish a Gratuity Fund and continually accumulate it on a monthly basis so that when payment is required under the Payment of Gratuity Act (PGA), it can be made promptly to the staff/nominee. I request you to shed more light on the advantages of having an LIC scheme over a gratuity fund.
From India, Chennai
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Small organizations establish a Gratuity Fund and continually accumulate it on a monthly basis so that when payment is required under the Payment of Gratuity Act (PGA), it can be made promptly to the staff/nominee. I request you to shed more light on the advantages of having an LIC scheme over a gratuity fund.
From India, Chennai
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From United States, Ashburn
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From United States, Ashburn
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Dear friend from CIM-Operations,
Sorry to have missed your post and for my belated response. The LIC collects the annual premium based on the current salary of the employees covered under the policy and disburses the amount based on the last salary drawn when the occasion for payment of gratuity arises. If I remember correct, there is also a policy covering the life of the employee on payment of some additional premium so that in case of death at any time before attaining the age of superannuation, the deceased employee's nominee would get the gratuity as if he had completed the entire service up to the retirement age. Thus, this is calculated on an actuarial basis, and the employer is relieved of the burden of shelling out a lump sum of money at a time. The employees are also assured of gratuity despite the vicissitudes of business. You may visit the website of LIC or contact any branch for complete details in this regard.
From India, Salem
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Sorry to have missed your post and for my belated response. The LIC collects the annual premium based on the current salary of the employees covered under the policy and disburses the amount based on the last salary drawn when the occasion for payment of gratuity arises. If I remember correct, there is also a policy covering the life of the employee on payment of some additional premium so that in case of death at any time before attaining the age of superannuation, the deceased employee's nominee would get the gratuity as if he had completed the entire service up to the retirement age. Thus, this is calculated on an actuarial basis, and the employer is relieved of the burden of shelling out a lump sum of money at a time. The employees are also assured of gratuity despite the vicissitudes of business. You may visit the website of LIC or contact any branch for complete details in this regard.
From India, Salem
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