Gratuity payment

This law applies to all establishments employing 10 or more workers. Gratuity is payable to the employee if he or she resigns or retires

Mr. Rama Chary has given valuable advice. Kindly follow it.

Payment of Gratuity Act is a social security tool.

Gratuity is statutory benefit employer has to disburse to employee who are eligible to get it. There are provisions for interest for overdue payment, imprisonment and penalty to erring/defaulting employers.

You have posted that:

---“even if company is not registered under act”

Payment of Gratuity Act, 1972

An Act to provide for a scheme for the payment of gratuity to employees engaged in……………… shops or other establishments………

Section: 1
Short title, extent, application and commencement.

(3) It shall apply to­ –

(a)……

(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;

(c)……

(3A)…….

4………

Section: 2
Definitions.

Gratuity shall be payable to an employee………

Section: 4A
Compulsory insurance

(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer……………………. obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:

(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).

(5) Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of 'contribution to all approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority.

(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.

Section: 7
Determination of the amount of gratuity.

(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined.

(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within……….. simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:

{It is felt the interest is @10%}

Section: 8
Recovery of gratuity.

Section: 9
Penalties.

(2) An employer who contravenes, or makes default in complying with, any of the provisions of this Act or any rule or order made there under shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to one year, or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both:

Mr. Kumar is already discribe not only the breif but also the law.