Gratuity Compliance for Employers comes up with a lot of questions, especially for establishments meeting the applicable employee headcount threshold dealing with it for the first time. Here are clear answers to what we're asked most often.
What's the minimum service period for gratuity eligibility?
A minimum period of continuous service is generally required, subject to certain exceptions.
Is gratuity payable even if an employee resigns?
Yes, gratuity is generally payable regardless of whether the employee resigns or is terminated, as long as eligibility conditions are met.
Can gratuity be funded through insurance?
Yes, many employers maintain a group gratuity insurance scheme to fund this obligation.
What happens if gratuity isn't paid on time?
Interest and penalties can apply for delayed payment.
Still Have Questions?
Every business situation is a little different, and Gratuity Compliance for Employers is no exception. If your case doesn't fit neatly into the questions above, it's worth getting a second opinion before proceeding.
What You'll Typically Need
- Employee headcount confirming applicability
- Records of continuous service for each employee
- Gratuity calculation based on last drawn salary and tenure
- Gratuity fund or insurance arrangement, where applicable
Need Help With This?
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