Background
The Karnataka Compulsory Gratuity Insurance Rules, 2024, were introduced under the authority of Payment of Gratuity Act, 1972. These rules mandate the registration and insurance coverage of establishments to ensure timely and secure payment of gratuity to eligible employees. The intent is to enforce financial security for employees through structured insurance coverage or gratuity fund mechanisms.
Applicability
These rules are applicable to every factory, mine, oilfield, plantation, port, Railway Company, every shop or establishment where 10 or more persons are employed or were employed on any day during the preceding 12 months and any other establishment Central Govt. may, by notification, specify.
Compliances under the Rules in accordance with the Act
Every employer shall submit an application in Form-I to get their establishment registered with the Controlling Authority or designated officer within thirty days of obtaining insurance, along with the list of insured employees.
Employers must furnish updated details of insured employees in Form-III to the Controlling Authority during initial registration and whenever changes occur in employee coverage or policy details.
Employers with an approved gratuity fund or those employing 500 or more people may opt to continue the arrangement by submitting Form-II, ensuring full coverage of gratuity liability under the Act.
Employers, except government establishments, must obtain gratuity insurance as per Section 4A(4) from LIC or other approved insurers under applicable laws like Insurance Act, Companies Act, IRDAI Act, etc.
Employers must renew the gratuity insurance policy timely and intimate the Controlling Authority within fifteen days of renewal. They must also initiate the renewal before the expiry of the existing policy.
Employers with an approved Gratuity Fund must register the trust with equal representation from employer and employees, and ensure compliance with the Indian Trusts Act, Income Tax Act, and applicable laws.
The Gratuity Trust shall be managed either privately, jointly with an insurance company, or directly by the employer by contributing the calculated amounts periodically to the approved fund.
Penalties & Punishments
Under Section 91:
Conclusion
The Karnataka Compulsory Gratuity Insurance Rules, 2024, ensure that all eligible employees receive their gratuity dues in a timely and secure manner through either insurance or approved gratuity funds. These rules increase transparency, mandate reporting, and standardize compliance procedures. They are a step forward in enhancing employee financial security and employer accountability in the state of Karnataka.
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