✔ A gratuity is a one-time payment made by the employer to the employee in appreciation for the services they have rendered to the company.
✔ The Act applies to establishments employing 10 or more employees, and the gratuity must be paid on the termination of employment or on superannuation.
✔ According to the act, an employee who has completed 5 years or more of continuous service with an employer is eligible for gratuity.
✔ The amount of gratuity payable is calculated based on the employee's last drawn salary and the number of years of service.
Under The Payment of Gratuity Act, 1972, organizations employing 10 or more employees are required to register with the controlling authority, which is usually the Regional Provident Fund Commissioner, within 30 days of becoming liable for gratuity payment.
Under the Gratuity Act, 1972, employers must comply with provisions such as payment of gratuity to eligible employees, maintenance of accurate records, display of notice in the premises, submission of annual returns to the controlling authority, and deduction of gratuity from salary in case of resignation or termination before completing 5 years of service.
