What is the eligibility criteria for payment of Gratuity?
In order to receive gratuity, you need to fit the following eligibility criteria:
You should be eligible for superannuation
You should have retired from the job.
You should have resigned after remaining employed for 5 years with the company
In case of your death, or if you become disabled on account of sickness or accident
Frequently Asked Questions on Gratuity
1. I resigned from my job after working for 4.5 years. Would I be eligible to receive gratuity?
A) No. You need to complete at least 5 years of service to be eligible for payment of gratuity. However, according to a ruling of Madras High Court, an employee is eligible for gratuity in case he completes 240 days of service in the fifth year of service.
In yet another case, if the employee dies during his employment, his legal heir will be eligible for gratuity even if he did not complete 5 years of service.
2. If an individual is a contract employee, will he receive gratuity upon completing 5 years in service?
A) If the individual is on the rolls of the company rolls, he will be regarded as an employee. He will be eligible to receive gratuity. But, if he works under a contractor who is not part of the company, then contractor will be responsible to provide the gratuity and not the company.
3. Is there any upper limit on the amount of gratuity that will be received?
A) Yes. The amount of gratuity paid by a company cannot exceed more than Rs. 10 lakh, irrespective of the number of years of service of the employment.
4. How much time does the employer take to release the amount of gratuity?
A) Ideally, as per the government mandate, the employer should remit the gratuity within 30 days from the date of full and final settlement of the employee. In case of any delay in payment, the employer is liable to pay a simple interest on the gratuity from the due date until the date when payment is made.