Our company has taken Group Gratuity Policy from LIC and paying gratuity on gross salary. The premium was also calculated and paid to LIC on gross salary. But while making full & final settlement, the gratuity was calculated and paid on basic salary. How can we claim the balance gratuity amount and who is the competent authority in such cases.
From India, Noida
From India, Noida
The perceived problem is LIC premium. Send a letter & ask your specific query of premium charged on gross salary. Give some examples. If you are right, you can claim the difference with retrospective effect. But statutory gratuity is payable on basic (& DA) only.
From India, Mumbai
264From India, Mumbai
Dear Sumit Barua,
Group Gratuity Policy is, in fact, a contract of insurance only in between the Insurer viz LIC and the employer though the beneficiary is the employee covered by the policy. As such the employee can demand the maximum sum of gratuity only as per the Payment of Gratuity Act,1972 and not the maturity value of the insurance plan. When the gratuity is not paid as per the provisions of the PG Act or delayed, of course he can proceed against both the employer and the Insurer. The insurer's liability is limited to the premium paid by the employer.
If your salary structure comprises of different components such as basic, dearness allowance and other allowances, only the sum total of the last drawn basic and D.A alone would be taken for computation of your gratuity as per the Act on the termination of employment and not on the basis of the premium paid; if the component of D.A is absent in the wage structure, only basic is to be taken into a/c and in case it is consolidated, the entire sum has to be taken into account.
In case the amount of gratuity paid by the employer through the LIC is less than the amount as per the Act, you can file a claim u/s 7 of the Act to the Controlling Authority under the Act.
From India, Salem
Group Gratuity Policy is, in fact, a contract of insurance only in between the Insurer viz LIC and the employer though the beneficiary is the employee covered by the policy. As such the employee can demand the maximum sum of gratuity only as per the Payment of Gratuity Act,1972 and not the maturity value of the insurance plan. When the gratuity is not paid as per the provisions of the PG Act or delayed, of course he can proceed against both the employer and the Insurer. The insurer's liability is limited to the premium paid by the employer.
If your salary structure comprises of different components such as basic, dearness allowance and other allowances, only the sum total of the last drawn basic and D.A alone would be taken for computation of your gratuity as per the Act on the termination of employment and not on the basis of the premium paid; if the component of D.A is absent in the wage structure, only basic is to be taken into a/c and in case it is consolidated, the entire sum has to be taken into account.
In case the amount of gratuity paid by the employer through the LIC is less than the amount as per the Act, you can file a claim u/s 7 of the Act to the Controlling Authority under the Act.
From India, Salem
You should have paid premium calculated on the basis of basic and DA only.
From India, Thiruvananthapuram
From India, Thiruvananthapuram
Dear Sumit, Greetings for the day, Calculation of Gratuity is done on basic salary+da and formula should be ; current basic+da/26 * 15* year of service. Thanks & Regards, from, sumit kumar saxena
From India, Ghaziabad
From India, Ghaziabad
There is a point in the statement of Shri Varghese Mathew that we should pay LIC premium worked out on Basic & DA only & not on Gross salary.
Since LIC is paying the Gratuity Benefit only on Basic & DA, the Companies can work out Premeium payable on Basic & DA instead of Gross salary as is being done now by some Cos. Actually, Co. is paying more to LIC as premium and there is no corresponding benefit to employees.
Can we request LIC to clarify the matter??
HR Consultant 5.8.2017
From India, Bangalore
Since LIC is paying the Gratuity Benefit only on Basic & DA, the Companies can work out Premeium payable on Basic & DA instead of Gross salary as is being done now by some Cos. Actually, Co. is paying more to LIC as premium and there is no corresponding benefit to employees.
Can we request LIC to clarify the matter??
From India, Bangalore
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Gross Salary(1).xls