Mode of payment of gratuity

Paycheck, salary, compensation, minimum wages, salary survey, legal aspects, legal tips, payment, gratuity

Section 4 of the Payment of Gratuity Act, 1972 provides the procedure for payment of gratuity to an employee. The said section contemplates that gratuity payable under the Act should be paid in cash, or if so desired by the payee, in demand draft or bank cheque to the eligible employee, nominee or legal heir, as the case may be.

The second provision to sub-section (1) of the Section 4 of the Act, further lays down that in case of death of the employee, gratuity payable to him should be paid to his nominee or , as the case may be , to the guardian of such nominee or ; if no nomination has been made, then it should be paid to his heirs.

A further obligation of the employer is to intimate the details of payment to the controlling  authority of the area while making payment of the gratuity amount. Where, however, the eligible employee, his nominee, legal heir or the guardian of the nominee, as the case may be , so desires and the amount of gratuity payable is less than one thousand rupees, payment may be made by postal money order after deducting the postal money order commission thereof from the amount payable.


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