We have total 40 employees in our company. Our company follows all the compliance of PF & ESIC. For Gratuity, we have procured a policy from LIC & have paid a certain amount to them at the time of the inception of the Policy in the year 2018. Now while renewing the policy company is thinking not to cover all employees in the policy. Considering the rate of attrition there are very few employees who stay back in our company for more than 5 years. Hence Management has decided to cover 10 employees under the LIC gratuity policy scheme and once the members out of 10 will leave the company will add subsequent employees based on the seniority chronology. This is just to avoid blocking of money & maintaining the liquidity. Is it correct as per the compliance?
From India, Taramani
2From India, Taramani
Dear Kaskar ji,
You need to cover your all employees under the policy. Every year at the time of renewal you give the details of employees left during the year and employee joined during the year. The premium of the policy is calculated on the basis of information provided and thereby so called rate of attrition is taken care of.
If you take a policy of only 10 persons, it will be absolutely wrong compliance.
From India, Mumbai
You need to cover your all employees under the policy. Every year at the time of renewal you give the details of employees left during the year and employee joined during the year. The premium of the policy is calculated on the basis of information provided and thereby so called rate of attrition is taken care of.
If you take a policy of only 10 persons, it will be absolutely wrong compliance.
From India, Mumbai
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Statutory Compliance of a Industrial or Commercial Unit.xls