Karnataka Compulsory Gratuity Insurance Rules!

General Discussions
1

Hi,

What is the process for Karnataka Compulsory Gratuity Insurance Rules, 2024

Can any one help me on how to do the fund valuation for Gratuity Insurance.

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Hey @Yuva ,

To know more about the Karnataka Compulsory Gratuity Insurance Rules 2024, we are conducting a Parichay session on the 7th of Feb. Please find below the registration link for your reference -

Link - https://www.greythr.com/webinar/register/gtw-ed86bqcipu5es721/?v-type=prospect&utm_source=Activecampaign&utm_medium=Email&utm_campaign=240129_wbn_parichay_68

Take this moment to know everything about your query in this parichay session. Hope this helps.

Community Manager.

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3

Hi,

Please find enclosed the Karnataka compulsory gratuity Insurance rules and summarised below points for your understanding.

Karnataka Compulsory Gratuity Insurance Rules, 2024.pdf (300 KB)

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4

thanks for update and legal Calander

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5

Dear Team,

Can any one help me on how to do the fund valuation for Gratuity Insurance.

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6

Do the companies need to take insurance for complete gratuity or only for future service i.e in case of death of an employee?

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8

Hi, Yesterday’s Parichay on this topic was really informative.

We have approached our insurance broker and true to the sharing yesterday, they were insisting on taking a gratuity trust :slight_smile: … Also they mentioned that though we have other branches, we still must get the gratuity insurance -

@Kaulin , can you please try to reach the speaker yesterday and ask again - though he explained yesterday that if with branches outside Karnataka, it is not compulsory since the Central government rules apply and the Central government has not yet made it mandatory… If he can share any document or article or memorandum that clearly mentions that - it would be very helpful.

Thank you.

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9

Hi Ludy,

As a quick reference, let us see what Section 4A (1) and (2) of the Payments of Gratuity Act, states; it provides for:

Compulsory insurance
(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer: Provided that different dates may be appointed for different establishments or class of establishments or for different areas.

(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement and every employer employing five hundred or more persons who establishes an approved gratuity fund in the manner prescribed from the provisions of sub-section (1).

In the scenario of an employer having established branches in multiple states, the employer have to refer to the Section 2(a) of the Payment of Gratuity Act that defines appropriate Government.

The expression “Appropriate Government”’ means, -
(i) in relation to an establishment
a. belonging to, or under the control of, the Central Government,
b. having branches in more than one State,
c. of a factory belonging to, or under the control of, the Central Government,
d. of a major port, mine, oilfield or railway company, the Central Government,

(ii) in any other case, the State Government.

Therefore the employers having its offices in multiple states are subject to the appropriate Government i.e., the Central Government.
Central Government has not framed any rules in exercise of power conferred on it under Section 4-A of the Payment of Gratuity Act.
Hence, rules framed by the Government of Karnataka will not be applicable to such establishments.

Until the Central Government frames the rules for obtaining of insurance policy towards the liability of the employer for payment of gratuity under the Act, there is no obligation on the employers (having offices in multiple states) to obtain insurance policy to meet company’s liability under the Act.

Hope this helps. There is no separate notification for this but the letter of law interprets as explained above.

Regards,
Bhuvana Anand

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10

@Bhuvana_Anand ,

This is the explanation I am looking for, thank you sooooo much :slight_smile:

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11

Hi Kaulin,
May I please get a recording of this session.

Thank You,
Annette

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12

Can I get Original Notification Government Order issued by Government of Karnataka?

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13

Dear Team,

Requesting to share the video towards subject for understanding.

REGARDS

GURUDAS S LADGAOKAR

HR MANAGER

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14

Hello @annette @GURUDAS and everyone,

We will make sure that you have the recording link by Monday (12th Feb). This is for your reference.

Hope this helps.

Community Manager.

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Hi Vijay Kumar,

Please find the notification attached.
Karnataka Compulsory Gratuity Insurance Rules, 2024.pdf (1.1 MB)

Regards,
Bhuvana Anand

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17

@Bhuvna Anand

We are subsidiary to another Organisation which has a trust. But both organisations are different entity and Principle company is having corporate office in Delhi and ours is in Bangalore. In this case, can we use the same trust of our principle company for Gratuity Fund. Kindly confirm.

Thank you, Sreeja

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18

Hi Sreeja,

The Trust would have been constituted as per the Indian Trusts Act and registered for the Principal company. The same Trust Deed will not be covering the subsidiary entity. Trusts formed for Gratuity to be irrevocable.

You have to constitute another trust for the subsidiary or opt for Insurance coverage that provides for multiple entities. This you have to check with the Insurance providers for the options / proposals they have with respect to Gratuity insurance.

If there is a merging of companies, the respective amendments can be recorded before the Trust authorities.

Hope this helps.

Regards,
Bhuvana Anand

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19

Hello Community members,

Please find below the Parichay webinar recording for your reference…

Community Manager.

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20

I think you can use subject to appropriate modifications in the trust deed and trustee representation from both organisations . Please check with legal consultant. Regards

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21

Hello,
Please can someone guide me on Karnataka Compulsory Gratuity Insurance Rules.

If a Company has Working Capital / Cash Flow issues what are the available options. Do we need to complete the Form and get registered but at the same time we submit a request letter to the Authorities seeking relaxation?

Would penalties be imposed or maybe not because nothing is mentioned in the rules about penalty.

Appreciate if you could share your thoughts and/or guidance.

Thank you.
Warm regards

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