Dear Seniors,
As mentioned in one of the above posts, please share your views on the following query.
Q.1 Why is it good to have Gratuity Insurance?
Ans. Gratuity is payable only if an employee completes a minimum of 5 years of service. However, in the case of the death of an employee, the rule of completing 5 years does not apply, meaning that Gratuity is payable. The sum payable is usually high. Ideally, the compensation for death or permanent disability should be calculated based on the average increase in basic salary per year. For this example, we will consider the last earning basic salary, which is $17,000.
Employee's date of Birth: 01.01.1988
Current monthly basic salary: $17,000
Date of appointment: 01.01.2010
Retirement age as per appointment letter: 58 years
Current age: 25 years
Date of the employee's death: 30.11.2012
Total number of years of service left: 58-25 = 33
Gratuity payable: $17,000/26 X 15 X 33 = $323,654
My question is: If an employee dies while working, will they be eligible as per the calculation mentioned above? Please consider the age factor and the calculation.
Kindly share your valuable reply.
From India, Dehra Dun
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24As mentioned in one of the above posts, please share your views on the following query.
Q.1 Why is it good to have Gratuity Insurance?
Ans. Gratuity is payable only if an employee completes a minimum of 5 years of service. However, in the case of the death of an employee, the rule of completing 5 years does not apply, meaning that Gratuity is payable. The sum payable is usually high. Ideally, the compensation for death or permanent disability should be calculated based on the average increase in basic salary per year. For this example, we will consider the last earning basic salary, which is $17,000.
Employee's date of Birth: 01.01.1988
Current monthly basic salary: $17,000
Date of appointment: 01.01.2010
Retirement age as per appointment letter: 58 years
Current age: 25 years
Date of the employee's death: 30.11.2012
Total number of years of service left: 58-25 = 33
Gratuity payable: $17,000/26 X 15 X 33 = $323,654
My question is: If an employee dies while working, will they be eligible as per the calculation mentioned above? Please consider the age factor and the calculation.
Kindly share your valuable reply.
From India, Dehra Dun
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Hi Nilesh,
I would like to shed some light on your situation. The Payment of Gratuity Act, 1972 states that it is applicable to any establishment in which 10 or more people are employed, and the employee has rendered a service of 5 years and is paid after termination. Both of these conditions are valid in your situation. However, the law also mentions the "Forfeiture of Gratuity," which states that the gratuity can be forfeited wholly or partially by the employer if the service is terminated.
Gratuity is calculated at the rate of 15 days' wages for every completed year (wages refer to the last drawn rate of wages). You can calculate your gratuity using this information.
I hope this helps.
Ankita
From India, Pune
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I would like to shed some light on your situation. The Payment of Gratuity Act, 1972 states that it is applicable to any establishment in which 10 or more people are employed, and the employee has rendered a service of 5 years and is paid after termination. Both of these conditions are valid in your situation. However, the law also mentions the "Forfeiture of Gratuity," which states that the gratuity can be forfeited wholly or partially by the employer if the service is terminated.
Gratuity is calculated at the rate of 15 days' wages for every completed year (wages refer to the last drawn rate of wages). You can calculate your gratuity using this information.
I hope this helps.
Ankita
From India, Pune
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