Rakhee Tiwari

3rd sem
Topics covered
 Meaning
 Maximum gratuity
 Rate of gratuity
 Forfeiture
 Duty of an employer
 Mode for payment
 Inspectors
 Penalty & offence
 Display of notice
Meaning of Gratuity
Gratuity is a kind of retirement benefit,
like pension. It is a payment intended to
help an employee after his –
(a) On his superannuation
(b) On his retirement or resignation
(c) On his death or disablement
Maximum Gratuity
The amount of gratuity shall not exceed
Rs. 2,50,000 [Sec.4 (3)]
The Amendment Act of 1998 has raised
it to Rs. 3,50,000
Rate of gratuity
[sec.4(2)]
 For every completed year the employer
shall pay gratuity at the rate of 15 days’
wage based on the rate of wages last
drawn by the employee concerned.
Forfeiture of Gratuity
[Sec.4(6)]
 It deals with the case in which gratuity
payable to an employee may be forfeited.
The gratuity payable to an employee may
be
forfeited-
(a) Disorderly conduct or any other act of
violence on his part
(b) Any act which constitutes an offence in the
course of his employment
Duty of an Employer to pay
Gratuity
 The employer should pay the gratuity
within within 30 days from the date it
becomes payable to the person to whom
the gratuity is payable.
 Delayed payment of gratuity has been
fixed at 10% p.a
Mode for payment of
Gratuity [Rule.9]
 In cash or
 If so desired by the payee, by demand
draft or bank cheque
 In case of death of the employee,
gratuity payable to him should be paid to
his nominee.
INSPECTORS [SEC.7A &
B]
 Appointment of inspectors
 Power of inspectors-

(a) Require to furnish information

(b) Enter and inspect
(c) Examine relevant matter
(d) Make copies of or take extracts from any
register, record, notice
Penalties and Offence
[sec. 9 to 11]
 For false statement or false
representation for the purpose of
avoiding any payment to be made.
 Exemption of employer from liability in
certain cases –
(a) He has used due diligence to enforce
the execution of the Act
(b) Other person committed the offence
 Display Of Notice
[Rule 4]
 Noticeat the conspicuous place
 language
THANKYOU