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Karnataka Compulsory Gratuity Insurance Rules, 2024 – GD SN Co.

The Government of Karnataka introduced the Karnataka Compulsory Gratuity Insurance Rules, aimed at regulating the payment of gratuity to eligible employees in the state. These rules provide a framework for employers to follow regarding the insurance, administration, and disbursement of gratuity benefits. Understanding these rules is essential for employers to ensure compliance and fulfil their obligations towards their employees. In this blog post, we will delve into the salient features of these rules and their implications for employers in Karnataka.

Salient Features of the Karnataka Compulsory Gratuity Insurance Rules, 2024:

  1. Title and Commencement: The rules are officially named the Karnataka Compulsory Gratuity Insurance Rules, 2024. They come into force from the date of publication in the Official Gazette.
  1. Insurance for Payment of Gratuity: New employers must obtain a valid insurance policy within 30 days from the rules’ applicability from LIC or any private Insurance institutions. Existing employers must obtain insurance within 60 days from the commencement of the rules i.e. before 10th Mar, 2023. Employers are required to make timely premium payments and renew policies, with prompt notification to the Controlling Authority of any changes.
  1. Recovery of Gratuity Amount: The Controlling Authority has the power to recover gratuity amounts from the insurance company in case of disputes or as determined by the employer.
  1. Registration of the Establishment: Employers must register their establishments with the Controlling Authority within 30 days of obtaining insurance. Details of insured employees must be submitted, and updates provided when there are changes.
  1. Continuation of Approved Gratuity Fund: Employers with an existing approved gratuity fund or those employing 500 or more persons may continue or adopt such arrangements by submitting an application.
  1. Incorporation of Gratuity Trust: Employers with approved gratuity funds must register the Gratuity Trust with representatives and comply with relevant laws and regulations. The Trust can be managed privately, by the insurance company, or jointly. The Trust must adhere to certain standards and procedures for claiming and releasing gratuity amounts.
  1. Compliance with the Payment of Gratuity Act, 1972: Employers must ensure compliance with the provisions of the Payment of Gratuity Act, 1972, to fulfill their obligations.
  1. Implications for Employers: The Karnataka Compulsory Gratuity Insurance Rules, 2024, have several implications for employers in the state. They emphasize the importance of timely insurance procurement, accurate record-keeping, and adherence to legal requirements regarding gratuity payments. Employers must also ensure that their gratuity funds or trusts are managed and operated in compliance with the rules to avoid penalties or legal issues.

Conclusion: The Karnataka Compulsory Gratuity Insurance Rules, 2024, play a crucial role in regulating the payment of gratuity to employees in Karnataka. Employers must familiarize themselves with these rules to ensure compliance and provide their employees with the gratuity benefits they are entitled to. By understanding and adhering to these rules, employers can demonstrate their commitment to the welfare of their employees and maintain a positive relationship with them.

Karnataka Compulsory Gratuity Insurance Rules, 2024

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