Employers who delay the payment of gratuity are liable to pay 10% interest on the gratuity amount, as per a notification issued by the Central Government.
The Jharkhand High Court upheld the order of the Deputy Labour Commissioner, directing an employer to pay simple interest at 10% per annum on the delayed gratuity amount.
The employer in the case had challenged the order and sought a lower interest rate, but the court ruled that the rate is determined by the Central Government.
The court observed that the Central Government had issued a notification in 1987 setting the rate of interest at 10% per annum for delayed gratuity payments.