As per Rule 3(2) of the Rules, the employer of an establishment existing at the time of commencement of Rules is required to obtain a valid insurance policy within 60 (sixty) days from the date of commencement of the Rules for its liability for payment towards the gratuity to all eligible employees under the Payments of Gratuity Act, 1972 (“Act”).
Every new employer is required to obtain such valid insurance policy within thirty days from the date on which the Rules become applicable on such establishment.
A similar approach has previously been taken by States like Kerala, Andhra Pradesh and Telangana and compulsory gratuity insurance rules have been issued by them.
Later, by way of corrigendum bearing no. LD 325 LET 2023, on July 4, 2024, the Karnataka government substituted the time limit for an employer to obtain a valid insurance policy under the above-mentioned provision to 6 (six) months instead of the initial requirement of sixty days.
It is pertinent to note that the extension is only for the existing establishments. As far as any new establishments are concerned, the stipulated period of 30 (thirty) days shall continue to be applicable.
Source: Barandbench
