Compliance requirements under the Rules in accordance with the Act

1. Form C: Notice of closure of the establishment (Rule 3)

An employer intending to close down the business shall submit a notice in Form ‘C’ to the controlling authority of the area at least sixty days before the intended closure.

2. Display of Notice by employer covered under Andhra Pradesh Payment of Gratuity Rules (Rule 4)

The employer shall display conspicuously a notice at or near the main entrance of the establishment in bold letters, in English and a language understood by the majority of the employees. The notice should specify the name and designation of the officer authorised by the employer to receive notices under the Act or Rules.

A fresh notice must be displayed immediately if the earlier notice becomes illegal or needs modification.

3. Notice for Payment of Gratuity (Form L/M) (Rule 8)
   Within 15 days of receiving an application for gratuity payment, the employer must issue notice to the employee:

• • Form L: If the claim is found admissible.
  • Form M: If the claim is found not admissible.

4. Form L: Notice for payment of gratuity (Rule 8)
   Within fifteen days of the receipt of an application for payment of gratuity, the employer shall if the claim is found admissible after verification, the employer shall issue Form ‘L’ to the employee, nominee, or legal heir. This notice shall state the amount payable and fix a payment date, which shall not be later than 30 days from the application date.
   The notice must be served personally with acknowledgment of receipt or sent by registered post with acknowledgment due.
5. Payment of gratuity (Rule 8)

The gratuity amount must be paid within 30 days of the receipt of the application for payment.

6. Form M: Notice rejecting claim for payment of gratuity (Rule 8(1)(ii)))
   If the claim for gratuity is not found admissible, employer to issue a notice in Form `M’ to the applicant employee, nominee or legal heir, as the case may be, specifying the reasons why the claim for gratuity is not considered admissible. Notice shall be served on the applicant either by personal service after taking receipt or by registered post with acknowledgement due
7. Form L: Notice for payment of gratuity in employer’s office (Rule 8(2))
   In case payment of gratuity is due to be made in the employer’s office, the date fixed for the purpose in the notice in Form “L” shall be refixed by the employer, if a written application in this behalf is made by the payee explaining why it is not possible for him to be present in person on the date specified. Notice shall be served on the applicant either by personal service after taking receipt or by registered post with acknowledgement due
8. Mode of payment of Gratuity (Rule 9)

Gratuity shall be paid by a crossed cheque or Demand Draft to the eligible employee, nominee, or legal heir.

9. Condition for Payment of gratuity (Section 4(1))

Gratuity becomes payable when an employee has rendered at least five years of continuous service and the employment ends due to:

• • Superannuation,
  • Retirement or resignation,
  • Death or disablement due to accident or disease.

10. Gratuity payable by Employer in Andhra Pradesh (Section 4(2))

For every completed year of service or part in excess of six months, the employer must pay gratuity at the rate of 15 days’ wages, based on the last drawn wage of the employee.

11. Gratuity payable to an employee, employed after disablement (Section 4(4))
    For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
12. Forfeiture of gratuity (Section 4(6))

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused;
(b) the gratuity payable to an employee [may be wholly or partially forfeited—
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act violence on his part, or

(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.