Payment of Gratuity Act, 1972

What is the Payment of Gratuity Act?

  • The Payment of Gratuity Act, 1972 provides for a lump sum payment to employees on retirement or resignation.

Key Provisions

  • Payment of bonus to employees
  • Eligibility criteria for bonus payment
  • Calculation of bonus
  • Time limit for payment of bonus

Applicability

  • Establishments with 10 or more employees
  • Factories, shops, and other establishments

Benefits

  • Payment of gratuity to employees
  • Financial security for employees and their families
  • Improved employee morale and motivation
  • Compliance with labor laws

Responsibilities of Employers

  • Pay gratuity to eligible employees
  • Calculate gratuity correctly
  • Maintain records and registers
  • Comply with inspection and certification requirements

Penalties for Non-Compliance

  • Fines and imprisonment
  • Other legal consequences

Key Features

  • Payment of gratuity to employees
  • Financial security for employees and their families
  • Improved employee morale and motivation
  • Compliance with labor laws
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