1. INTRODUCTION
On January 10, 2024, the Government of Karnataka notified the
Karnataka Compulsory Gratuity Insurance Rules, 2024
("Insurance Rules") under Section 4A of
the Payment of Gratuity Act, 19721
("PGA"). The PGA applies to
establishments where 10 or more persons are employed or were
employed in the last 12 months in the preceding year.
As per Section 4A of the PGA, once the provision has been
notified by the 'appropriate government', an employer is
required to obtain an insurance cover for their monetary liability
under the legislation, unless specifically exempted by the
appropriate government. As per the PGA, the term 'appropriate
government' has been defined to mean the Central Government for
establishments: (a) belonging to or under the control of the
Central Government, (b) having branches in more than 1 state; (c)
that are factories belonging to or under the control of the Central
Government; and (d) that are a major port, mine, oilfield
