Employer not paying gratuity? Recover it - citizen guide 2026

If your employer refuses to pay gratuity after you complete 5 years of service, you have a legal recovery route. Send a written claim in Form I to the employer. If it is ignored or rejected, file Form N before the Controlling Authority under the Payment of Gratuity Act 1972 within 90 days.

Short on time? Read the step-by-step recovery process below, then copy the sample Form I claim and Form N application near the end of this page.

Gratuity is a lump-sum reward your employer pays for long service. Under Section 4 of the Payment of Gratuity Act 1972, you earn it after at least 5 years of continuous service, payable on resignation, retirement, death, or disablement. The rate is 15 days wages for each completed year of service.

The Payment of Gratuity Act 1972 is your enforcement tool. It applies to every factory, mine, shop, or establishment that employed 10 or more persons on any day in the preceding 12 months. Once it applies, the duty continues even if the headcount later drops below 10 (Section 1(3)).

Key provisions you will rely on:

• Section 4 sets eligibility (5 years continuous service) and the rate (15 days wages per completed year). The maximum gratuity is currently ₹20 lakh, raised from ₹10 lakh by the Payment of Gratuity (Amendment) Act 2018.
• Section 7 says that once gratuity becomes payable, the employer must determine the amount and notify you and the Controlling Authority in writing. The employer must pay within 30 days (Section 7(3)).
• Section 7(3A) orders the employer to pay simple interest for any delay beyond 30 days. By Central Government Notification S.O. 873(E) dated 1 October 1987, that rate is 10% per annum.
• Section 8 lets the Controlling Authority recover unpaid gratuity through the Collector as arrears of land revenue.
• Section 9 makes non-payment a criminal offence (see the penalties section below).

The Controlling Authority is an officer appointed by the appropriate government under Section 3. In most private-sector cases this is the Assistant Labour Commissioner for your area. Confirm the exact officer with your State Labour Department.

The RTI angle: Right to Information helps you track a stuck Form N application or get the Controlling Authority records. The office of a Labour Commissioner is a public authority, so you can file an RTI for the status, file number, and next hearing date of your gratuity application. Use our AI RTI Drafter to draft it in minutes.

1. Send a written claim in Form I to the employer. Form I is the prescribed application for gratuity. Send it by registered post or email with proof of delivery. Keep a copy. You normally apply within 30 days of gratuity becoming payable, but a late claim cannot be rejected for delay alone if the gratuity is genuinely due.
2. Wait 30 days for payment. The employer must pay within 30 days under Section 7(3). If the employer pays late, demand 10% simple interest under Section 7(3A) for the delay period.
3. File Form N before the Controlling Authority. If the employer rejects your claim, pays less than due, or stays silent, apply in Form N to the Controlling Authority within 90 days of that cause. The Authority can condone delay if you show sufficient cause.
4. Attend the hearing. The Controlling Authority hears both sides like a small tribunal. Bring your proof of service, salary records, and the Form I copy. The Authority then passes an order fixing the amount, interest, and a payment date.
5. Apply for recovery in Form T if the employer still defaults. If the employer ignores the order, apply in Form T to the Controlling Authority. Under Section 8, the Authority issues a certificate to the Collector, who recovers the amount as arrears of land revenue and pays it to you.
6. Track the file with an RTI if it stalls. If the Controlling Authority sits on your Form N, file an RTI to the Labour Commissioner asking for the status, file number, and reasons for delay.

• Appointment letter and any service record showing your joining and last working dates.
• Proof of 5 years continuous service (salary slips, PF statement, Form 16).
• Resignation or termination letter, or retirement order.
• Last drawn salary proof to calculate 15 days wages per year.
• Copy of your Form I claim and proof of delivery to the employer.
• Any reply, rejection, or short-payment notice from the employer.
• Nominee or legal-heir proof if you are claiming for a deceased employee (Form J or Form K).

• Waiting for the employer to act. The employer must pay within 30 days under Section 7(3) without you chasing. Send Form I early and start the clock.
• Missing the 90-day Form N window. Apply to the Controlling Authority within 90 days of the employer rejecting or ignoring your claim. Ask for condonation if you are late.
• Forgetting the 10% interest. Under Section 7(3A), delayed gratuity carries 10% simple interest. Claim it; do not accept only the principal.
• Assuming under 10 staff means no gratuity. If the establishment ever had 10 or more in the prior 12 months, the Act still applies (Section 1(3)).
• Treating the ₹20 lakh ceiling as the amount due. ₹20 lakh is the maximum cap, not a flat payout. Your gratuity is 15 days wages per completed year.

Section 9 makes default a criminal offence:

• Section 9(1): Knowingly making a false statement to avoid payment is punishable with imprisonment up to 6 months, or a fine up to ₹10,000, or both.
• Section 9(2): An employer who contravenes the Act faces imprisonment of 3 months to 1 year, or a fine of ₹10,000 to ₹20,000, or both. Where the offence is non-payment of gratuity, the term is 6 months to 2 years, unless the court records reasons for a lesser sentence.

Use these as plain-language templates. Get the exact statutory forms from your State Labour Department or the Payment of Gratuity (Central) Rules 1972.

Sample Form I claim to the employer:

To,
The Employer / HR Head
[Company name and address]

Subject: Application for payment of gratuity under Form I, Payment of Gratuity Act 1972

Sir/Madam,

I, [name], worked with [company] from [join date] to [last working date],
completing [number] years of continuous service. My last drawn monthly
wages were Rs [amount].

Under Section 4 of the Payment of Gratuity Act 1972, I am eligible for
gratuity at 15 days wages for each completed year of service. I request you
to determine and pay my gratuity within 30 days as required under Section
7(3), failing which I will be entitled to 10% simple interest under Section
7(3A) and will approach the Controlling Authority.

My bank details for payment are: [account details].

Date:
Place:
Signature
[Name, contact, address]

Sample Form N application to the Controlling Authority:

Before the Controlling Authority under the Payment of Gratuity Act 1972
[Office of the Assistant Labour Commissioner, area]

Application in Form N under Section 7

Applicant: [name, address]
Employer (Opposite party): [company name, address]

1. I was employed with the opposite party from [date] to [date],
   completing [number] years of continuous service.
2. I applied for gratuity in Form I on [date] (proof of delivery enclosed).
3. The employer has [rejected my claim / paid less / not responded] within
   30 days as required under Section 7(3).
4. The gratuity due is Rs [amount], being 15 days wages for each completed
   year, plus 10% simple interest under Section 7(3A) from [date].

I pray that the Controlling Authority direct the employer to pay the
gratuity with interest, and order recovery under Section 8 if the employer
defaults.

Date:
Place:
Signature of applicant
Enclosures: Form I copy, delivery proof, salary records, service proof

Sample RTI to track a Form N application:

To, The Public Information Officer
Office of the Labour Commissioner, [district/state]

Under the Right to Information Act 2005, please provide:
1. Current status and file number of my Form N application dated [date]
   against [employer name].
2. Date of the next hearing fixed before the Controlling Authority.
3. Copy of any order or notice issued on my application so far.
4. If delayed beyond the prescribed time, the reasons for the delay.

Fee of Rs 10 enclosed [or BPL exemption proof].

Date:
Signature
[Name, address, contact]

Need help drafting the RTI? Try the AI RTI Drafter and read The RTI Playbook.

Usually no. Section 4 requires at least 5 years of continuous service. The exception is death or disablement, where the 5-year rule does not apply and the nominee or legal heir can claim. Courts have also treated some service of 4 years and 240+ days in the fifth year as continuous service, but this depends on facts. Confirm your service record before applying.

The employer must pay within 30 days of the gratuity becoming payable, under Section 7(3). If the employer delays beyond 30 days, Section 7(3A) requires 10% simple interest for the delay period, as fixed by the Central Government notification dated 1 October 1987.

You apply in Form N under the Payment of Gratuity (Central) Rules 1972, within 90 days of the employer rejecting, short-paying, or ignoring your claim. The Controlling Authority can condone a delay if you show sufficient cause. For recovery after an order, you apply in Form T under Section 8.

The Controlling Authority is an officer appointed by the appropriate government under Section 3. For most private-sector workers this is the Assistant Labour Commissioner of your area. The exact officer varies by state and by whether the central or state government is the appropriate government. Confirm with your State Labour Department.

The current maximum is ₹20 lakh, raised from ₹10 lakh by the Payment of Gratuity (Amendment) Act 2018. This is a ceiling, not a fixed payout. Your actual gratuity is 15 days wages for each completed year of service, capped at ₹20 lakh.

No. RTI applies to public authorities, not private companies. But you can file an RTI to the Labour Commissioner or Controlling Authority, which are public bodies, to track your Form N application, get the file status, or obtain copies of orders. See the RTI First and Second Appeal guide if the office ignores your RTI.

The Act applies if the establishment employed 10 or more persons on any day in the preceding 12 months. Once it applies, the obligation continues even if staff later fall below 10, under Section 1(3). So a temporary dip in headcount does not remove your right to gratuity.

Yes. Under Section 9(2), an employer who does not pay gratuity can face imprisonment of 6 months to 2 years, or a fine, or both. Knowingly making a false statement to avoid payment is punishable under Section 9(1) with up to 6 months imprisonment or a fine up to ₹10,000.

• Payment of Gratuity Act 1972, full text - Chief Labour Commissioner: https://clc.gov.in/clc/sites/default/files/PaymentofGratuityAct.pdf
• Section 7 (determination, 30 days, interest) - India Code / Indian Kanoon: https://indiankanoon.org/doc/1974722/
• Section 9 (penalties) - Indian Kanoon: https://indiankanoon.org/doc/610587/
• Payment of Gratuity (Amendment) Act 2018 (₹20 lakh ceiling) - PIB: https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=178218
• 10% interest under Section 7(3A), Notification S.O. 873(E) - LiveLaw (Jharkhand HC, Tata Steel): https://www.livelaw.in/labour-service/delayed-payment-of-gratuity-employer-liable-to-pay-10-interest-central-government-notification-jharkhand-hc-278685

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