Employee Gratuity Rules: Gratuity amount is given at the time of retirement or leaving the job. But suppose a company embezzles the gratuity money of an employee despite being entitled to gratuity, then what can be done? Let us know this in this news below…
Gratuity is the amount that any company gives you as a reward for providing excellent services for a long time. Generally, if an employee has been serving the company continuously for 5 years, then he is considered entitled for gratuity.
Gratuity amount is given at the time of retirement or leaving the job. But suppose a company embezzles the gratuity money of an employee despite being entitled to gratuity, then what can be done?
Right to send legal notice-
If the company does not pay him the gratuity amount even after completing 5 years of service, then the employee can send a notice to the company regarding this. If even after this his problem is not resolved and the amount is not paid to him, then the employee can complain against the company to the District Labor Commissioner. If found guilty in the case, the company has to pay the gratuity amount along with fine and interest.
These are the rules of gratuity-
If 10 or more people work in a private or government company, then that company should provide the benefit of gratuity to all the employees. Apart from the company, shops, mines and factories also come under the scope of this rule.
If an employee has worked in the company for 4 years and 8 months, then his service will be considered for full 5 years and he will get the amount of gratuity according to 5 years. If he has worked for less than 4 years and 8 months, then his service period will be counted as 4 years and in such a case he will not get gratuity.
If an employee dies while on the job, the entire amount deposited in his gratuity account is given to his nominee. In such a case, the condition of minimum 5 years of employment does not apply.
The notice period of the employee is also counted in the gratuity period. Suppose you resign from a company after working for four and a half years, but after resignation, you served a notice period of two months. In such a situation, your employment period will be counted only as 4 years and 8 months. And the gratuity amount will be given considering it to be 5 years.
Any company can give a maximum of Rs 20 lakh as gratuity to its employee. The amount received as gratuity is tax free. This rule applies to both government jobs and private jobs.
In these situations the company will not pay gratuity money-
If an employee is accused of unethical behavior and the company has suffered a huge loss due to his negligence, then the company has the right not to pay his gratuity. But to stop gratuity, the company will first have to present evidence and its reason. Whatever reason the company is giving, it has to issue a show cause notice to the employee.
After this both the parties are heard. Gratuity money will be stopped only after the employee is found guilty. But even in such a situation, the company will deduct only that amount as it has suffered loss. Apart from this, when the company or institution is not registered under the Gratuity Act, then the employees are not covered under the Gratuity Act. In such a situation, it is the company’s discretion to give gratuity or not.
