We have a total of 40 employees in our company. Our company follows all the compliance of PF & ESIC. For Gratuity, we have procured a policy from LIC & have paid a certain amount to them at the time of the inception of the Policy in the year 2018. Now while renewing the policy, the company is thinking not to cover all employees in the policy. Considering the rate of attrition, there are very few employees who stay back in our company for more than 5 years. Hence, Management has decided to cover 10 employees under the LIC gratuity policy scheme, and once the members out of 10 will leave the company, subsequent employees will be added based on the seniority chronology. This is just to avoid blocking of money & maintaining the liquidity. Is it correct as per the compliance?
From India, Taramani
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2From India, Taramani
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Dear Kaskar ji,
You need to cover all your employees under the policy. Every year at the time of renewal, you provide details of employees who have left during the year and those who have joined. The premium of the policy is calculated based on the information provided, thereby taking care of the so-called rate of attrition.
If you only take a policy for 10 persons, it would be a clear violation of compliance.
From India, Mumbai
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You need to cover all your employees under the policy. Every year at the time of renewal, you provide details of employees who have left during the year and those who have joined. The premium of the policy is calculated based on the information provided, thereby taking care of the so-called rate of attrition.
If you only take a policy for 10 persons, it would be a clear violation of compliance.
From India, Mumbai
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E compliance.pdf
Statutory Compliance of a Industrial or Commercial Unit.xls