Dear sir;
I have a doubt that under gratuity insurance scheme
1. When should employee be insured under Group insurance(At the time of joining or on completion of 5 years)?
2. suppose we make a annual premium of 100 employee in a year say jan 2012 and in year feb 2012 a 10 new employee joins then wen should we include in insurance mean next year jan 2013 or same month.?
3. if emploee joins and meet with death after 1 month and not covered in Gratuity insurance then who will pay gratuity till his retirement age?
regards
From India, Mumbai
6I have a doubt that under gratuity insurance scheme
1. When should employee be insured under Group insurance(At the time of joining or on completion of 5 years)?
2. suppose we make a annual premium of 100 employee in a year say jan 2012 and in year feb 2012 a 10 new employee joins then wen should we include in insurance mean next year jan 2013 or same month.?
3. if emploee joins and meet with death after 1 month and not covered in Gratuity insurance then who will pay gratuity till his retirement age?
regards
From India, Mumbai
You must take gratuity coverage of each employee since the date of joining.
In case you have left any person in coverage , and accidentally if any met with any causality while in the course of employment , the PE will be liable to pay.
Thanks
From India
In case you have left any person in coverage , and accidentally if any met with any causality while in the course of employment , the PE will be liable to pay.
Thanks
From India
Dear sir,
in case of death does the employer pay for number of year of service or till the retirement age
because employee is not covered in gratuity insurance & if employer does not pay then who will be responsible?
Regards
From India, Mumbai
in case of death does the employer pay for number of year of service or till the retirement age
because employee is not covered in gratuity insurance & if employer does not pay then who will be responsible?
Regards
From India, Mumbai
In the absence of applicability of section 4A of the Payment of Gratuity Act, (this section provides that the state government shall enforce the applicability of this section and, therefore, it is not necessary that in all the states linking of gratuity fund to Insurance scheme is mandatory) the employer is bound to pay the gratuity of an employee till the date of death only. Therefore, if the employee dies after working for 3 years, then the employer has to pay gratuity based on 3 years service. In the case of companies who have LIC linked gratuity scheme with add on cover for payment of gratuity based on retirement age, obviously, the LIC will take care of the same and pay the amount projected to the deceased employee's date of superannuation.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
1. An employee should be insured immediately after his joining and not after 5 years. Even if you insure him after 5 years, the Insurance Company is going to recover insurance premium for past 5 years salary paid.
2. In Feb you pay premium for 100 existing employees. Say 10 employees join in March, it is advisable to insure them in March itself, as stated above. (Sr. 1)
3. An employee dies before he is insured by the company under group gratuity scheme, the Company will still be liable to pay.
It is basically the company's obligation to pay the gratuity, a statutory obligation. This should be clearly understood. Your insurance is only a method of taking care of the financial burden at one time, should such an eventuality arise at any time in future (for example a large number of employees retiring / resigning in one year). Also the contribution to fund / or actual payment of gratuity on retirement is the only method to get it allowed as expenditure under the income tax act. Mere provision in the books of account is not allowed as expenditure in the income tax act.
Further under the income tax act the gratuity is allowable only to the extent it is actually funded by the company (under any group gratuity scheme of an insurance company, as approved by the Government).
From India, Pune
2. In Feb you pay premium for 100 existing employees. Say 10 employees join in March, it is advisable to insure them in March itself, as stated above. (Sr. 1)
3. An employee dies before he is insured by the company under group gratuity scheme, the Company will still be liable to pay.
It is basically the company's obligation to pay the gratuity, a statutory obligation. This should be clearly understood. Your insurance is only a method of taking care of the financial burden at one time, should such an eventuality arise at any time in future (for example a large number of employees retiring / resigning in one year). Also the contribution to fund / or actual payment of gratuity on retirement is the only method to get it allowed as expenditure under the income tax act. Mere provision in the books of account is not allowed as expenditure in the income tax act.
Further under the income tax act the gratuity is allowable only to the extent it is actually funded by the company (under any group gratuity scheme of an insurance company, as approved by the Government).
From India, Pune
Till recently updation of employees was done annually. But the LIC has come up with a new scheme wherein you can update the employees joining and leaving the company on a monthly basis. Once you opt for this new scheme, you can get the new joinees covered in the month in which they join. Other wise, you have to wait for the next annual updation date. If the date falls in January every year, the employees who join in January will get the benefit but at the same time, one who joins in February will have to wait for a year to be enrolled in LIC's gratuity scheme.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
Dear sir;
I have read many post and written that if company is not covered in Gratuity insurance and employees dies before 5 year of service then company will pay gratuity up to number of years not up to retirement.
is the employer bound to pay up to retirement? if he does not pay up to retirement is their any legal obligation.
Pls clarify
From India, Mumbai
I have read many post and written that if company is not covered in Gratuity insurance and employees dies before 5 year of service then company will pay gratuity up to number of years not up to retirement.
is the employer bound to pay up to retirement? if he does not pay up to retirement is their any legal obligation.
Pls clarify
From India, Mumbai
Paying gratuity projected to retirement age is an arrangement of LIC in return for a minimum amount of additional premia. Therefore, if there is no arrangement with Insurers, the employer's liability is limited to payment of service gratuity only. That means, if the employee dies in 3 years, his dependants will get gratuity calculated for 3 years and nothing more.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
An addition to what I have stated in my previous post in this thread on this. Just as payment of gratuity is a statutory obligation of the employer, taking insurance cover is also a statutory obligation of the employer under sec. 4-A of the Payment of Gratuity Act 1972.
From India, Pune
From India, Pune
Section 4A (1) states that the appropriate government shall notify the date on which the compulsory insurance of the gratuity fund shall come in to force. The state government is the appropriate government and many states are yet to notify it. In Ratnavalli Vs Ambalappadu Service Cooperative Bank Ltd (2005 (3)KLT320, 2005III LLJ379 Ker) the Kerala High Court had ruled that since Kerala Government had not notified the applicability of section 4A, the employer was not under any obligation to link its approved gratuity fund to LIC.
Of course, last year Kerala also notified that gratuity fund should be invested in LIC. Therefore, different states may have different dates in this regard.
Madhu.T.K
From India, Kannur
Of course, last year Kerala also notified that gratuity fund should be invested in LIC. Therefore, different states may have different dates in this regard.
Madhu.T.K
From India, Kannur
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