Hello!
I have been appointed as HR Manager in an organization. I don't have any experience in HR as I am a fresher.
My boss has asked me to look into the Gratuity issue of the employees. I know that Gratuity is to be paid to every employee leaving the organization having more than 5 Years of employment with that very organisation.
Now, my query is out of which funds does a employed need to pay Gratuity? Do I need to tie up with an insurer to pay monthly contribution for employees in Gratutiy fund head?
Kindly help me out.
Regards.
From India, Srinagar
I have been appointed as HR Manager in an organization. I don't have any experience in HR as I am a fresher.
My boss has asked me to look into the Gratuity issue of the employees. I know that Gratuity is to be paid to every employee leaving the organization having more than 5 Years of employment with that very organisation.
Now, my query is out of which funds does a employed need to pay Gratuity? Do I need to tie up with an insurer to pay monthly contribution for employees in Gratutiy fund head?
Kindly help me out.
Regards.
From India, Srinagar
Hello Usman,
I am not a legal person still I will share what I know.
Your company needs to register under the Gratuity act. Regarding fund every year company book gratuity fund based on the actuarial values by the CA of the company and input provided by the HR at the beginning of the financial year.
Generally Gratuity is maintained at the corporate office. Hope this may be clear to you; I would advise you to go through the act to know who all are eligible for gratuity.
From India, Bhubaneswar
135I am not a legal person still I will share what I know.
Your company needs to register under the Gratuity act. Regarding fund every year company book gratuity fund based on the actuarial values by the CA of the company and input provided by the HR at the beginning of the financial year.
Generally Gratuity is maintained at the corporate office. Hope this may be clear to you; I would advise you to go through the act to know who all are eligible for gratuity.
From India, Bhubaneswar
There is no registration under Gratuity Act.Employer has to pay gratuity from .Taking insurance for gratuity is his choice. Varghese Mathew 9961266966
From India, Thiruvananthapuram
From India, Thiruvananthapuram
There is a provision under gratuity act that every establishment must send a notice of commencement to the authority under gratuity act within 30 days of commencement of the organisation.
From India, Mumbai
From India, Mumbai
Usman,
There is no specific fund specified in the act from which gratuity is paid.
Depending on size of organisation, you need to create your own fund.
You need to sit and work this out based on your conditions.
If the business is large (and profit margins re good), and number of employees working more than 5 years is low, you may not need a fund as the business can afford to pay gratuity of the few who leave.
However, in order to ensure smooth cash flow and avoid disruption in case a large number leave at the same time, companies prefer to set aside some money for this. Ask your finance guys how they can do it.
Remember that anyone dying while in employment is entitled to gratuity even if he has not completed 5 years
Further, there is a provision in the act for compulsory insurance, which I think is for the larger companies. You can get in touch with LIC or one if the private insurance companies and check out their schemes. You get some tax benefits also for putting money into these schemes.
In creating your fund, remember that gratuity is based on last drawn salary. So we need to reset the amount upwards every year.
From India, Mumbai
There is no specific fund specified in the act from which gratuity is paid.
Depending on size of organisation, you need to create your own fund.
You need to sit and work this out based on your conditions.
If the business is large (and profit margins re good), and number of employees working more than 5 years is low, you may not need a fund as the business can afford to pay gratuity of the few who leave.
However, in order to ensure smooth cash flow and avoid disruption in case a large number leave at the same time, companies prefer to set aside some money for this. Ask your finance guys how they can do it.
Remember that anyone dying while in employment is entitled to gratuity even if he has not completed 5 years
Further, there is a provision in the act for compulsory insurance, which I think is for the larger companies. You can get in touch with LIC or one if the private insurance companies and check out their schemes. You get some tax benefits also for putting money into these schemes.
In creating your fund, remember that gratuity is based on last drawn salary. So we need to reset the amount upwards every year.
From India, Mumbai
Saswatabanerjee,
Yes there is a provision in POG rules that every establishment shall sent a notice of opening to controlling authority.But it is not registration.The CA is not registering the establishment with a reg No .He is not issuing a registration certificate.Similarly there is notice of closure.
Varghese Mathew
9961266966
From India, Thiruvananthapuram
Yes there is a provision in POG rules that every establishment shall sent a notice of opening to controlling authority.But it is not registration.The CA is not registering the establishment with a reg No .He is not issuing a registration certificate.Similarly there is notice of closure.
Varghese Mathew
9961266966
From India, Thiruvananthapuram
Gratuity will be paid after completion of 4 years and 240 days of fifth year. Govind Pawar
From India, Mumbai
From India, Mumbai
Sir,
I am an employee working in a PSU on contractual basis. Regarding gratuity i have a confusion? When an employee can claim for grauity? A contractual emplyee also entitled for benefit of gratuity?
For getting benefit of gratuity 05 years regular service is must or not?
for 03 years i have worked under a contractor and after three years the new contractor has come and he show our joining after one day. (DOJ should be 01 April but he showed 02 april)
Why? any reason for that? Are we eligible for gratuity?
From India, Aurangabad
I am an employee working in a PSU on contractual basis. Regarding gratuity i have a confusion? When an employee can claim for grauity? A contractual emplyee also entitled for benefit of gratuity?
For getting benefit of gratuity 05 years regular service is must or not?
for 03 years i have worked under a contractor and after three years the new contractor has come and he show our joining after one day. (DOJ should be 01 April but he showed 02 april)
Why? any reason for that? Are we eligible for gratuity?
From India, Aurangabad
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