The Payment of Gratuity Act 1978

The Payment of Gratuity Act provides for a scheme for paymenbt of amount in the form of “Gratuity” to employees engaged in factories, shops and establishment where 10 or more persons employed. Gratuity shall be payable to an employee on the termination after heas rendered continuous services of 5 year or on his superannuation or on his retirement or resingation or dath or disbalement due to accident or disease
The object of this Act providing Gratuity scheme is to provide a reirement benefit to the workmen who have rendered long service to the employer and have contributed to the growth of the organisation.
The Caluclation for payment of Gratuity is 15 days wages for every completed year of service or part thereof in excess of 6 months. Approvaed Grathity Fund can be established in companies engaging 500 or more employees.
Thelatest ceiling amount notified by Govt for payment of gratuity is Rs.20 Lakhs maximum. There other provisionas given under the act regarding registration of establishments under Payment of Gratuity Act, nomination by employees, display of notices, setttement of gratuity details to Controlling Authority under the Act.
The Gratuity amount cannot be attached in any execution of any decree, non payment by employer will be collect throguh District Collect in the form of Land Revenue. Penalties for non compliance amounts to imprisonment for 6 month or fine.