agree with mr gerry 303 that is the fact of gratutity act.And Employer is required to have provisions and pay to the fund every year cannot keep with him( fund ceated with LIC) Daya Anand
From India, Delhi
From India, Delhi
87Ingnorance of law is no excuse, now want to explain few facts regarding payment of Gratuity Act and want to reply the words stated by you in your post in view of Payment of Gratuity Act & Rules.
First of all everyone know that its a social benifit acure to an employee.
the idea of payment of Gratuity is a kind benvolane payment to him for the service rendered by an employee. this is a statute/legislation implemented by Govt for the social safty to all employees irrespetive of his designation.
Showing Gratuity in monthly CTC is totally enithical.
suppose if we offer some CTC to an prospective employee, these are his earned wages. And Gratuity is mandatory payable only after completion of continues service for a period of 5 year.
if we are deducting certian amount from the monthly like, LTA which is payable at the time of leaving of organisation.
Same as the case of Gratuity in case making part of monthly salary, if its the part of monthly CTC and dedected every month then, this should be paid to employee at the time leaving service even before completion of 5 years, becasue this he is not asking for the that benvolent fund which is as per Gratuity Act but he is asking for the deduction which was made from this earned wages.
It is upto the employer how to manage Gratuity Fund, whether take LIC or etc, but the premium paid for the Managment for Gratuity Fund should not be dedected from the wages of any employee, no such provison are given in Gratuity Act.
it's the statutory obligation of the employer to pay gratuity to such employees who has completed 5 years of service.
Moreover as per Gratuity Act the calculation of gratuity payable to done on last salary drawn then, how you can calculate the amount before 5/10/15 years on the wages from Ist month of joining.
this is not a condition for payment of certain wages, it's a obligation created by the law.
You are talking about incentive scheme for retention but these incentive scheme are as per policy of employer for as a employee retention policy, such schemes are the wish & will of employer, you can not compare such scheme with statutory enactments/legislative mandate.
some answer to your post is being given in red.
in my opinion or as per law if any employer is deducting gratuity from monthly wages then it should be remitance to employee even before the completion of 5 years. Other such amount should be deposited to Welfare Commissioner in the head of unpaid accumulation.
I have stated only the legal position, not what going in market, even this concept of CTC is no where defined, it's the wish of employer whatever he want can part as CTC.
Regards
As far as we know that gratuity is only applicable after completing 5 years in the organization and can only be paid then completetion of 5 yrs of servise. So after 5 yrs approx on which salary calculate / budget the gratuity. So that generaay this can not be calculate in ctc. There r many employees living the co. before complet the 5 yrs. Those co. r calculating gd in ctc, I think to attract confuseing to new joiner.
From India, Delhi
From India, Delhi
In some of the comments we are deviated from the main issue. What are the proposition of law we are not commenting on that. The main issue is whether showing the gratuity is ethical on the part of the company or not?
Three points to be kept in mind 1. Not showing CTC and paying after stipulated period 2. Showing in CTC and paying before stipulated period 3. Showing in CTC but not paying before stipulated period.
Now let us consider the first situation. If comp is not showing the gratuity in CTC and is paying after the required period the company has considered the long attachment of the employee and paid him as gratitude (what the employee has contributed towards achievement of the organization.)
In the second situation if the amount is shown and if the same has been kept in some other account than even in that case there would be no problem in paying the same what have been deducted
But if the company is deducting the same and not putting it into some other account than what the company is doing every one can under stand better as all are well qualified and there is no need to explain.
The only thing which I want to say that if the gratuity has been shown than it must be viewed as deduction.
From India, New Delhi
Three points to be kept in mind 1. Not showing CTC and paying after stipulated period 2. Showing in CTC and paying before stipulated period 3. Showing in CTC but not paying before stipulated period.
Now let us consider the first situation. If comp is not showing the gratuity in CTC and is paying after the required period the company has considered the long attachment of the employee and paid him as gratitude (what the employee has contributed towards achievement of the organization.)
In the second situation if the amount is shown and if the same has been kept in some other account than even in that case there would be no problem in paying the same what have been deducted
But if the company is deducting the same and not putting it into some other account than what the company is doing every one can under stand better as all are well qualified and there is no need to explain.
The only thing which I want to say that if the gratuity has been shown than it must be viewed as deduction.
From India, New Delhi
Dear, proposition of law is very much clear, Gratuity is payable after compelextion of 5 years of services, and its mandatory, and no deduction shall be made form wages towards contribution of Gratuity or Gratuity managed fund.
company has not considered becasue of long service of company. Earlier it was the sanerio but after implementation of Act, it became a statutory benifit and in case of statutory benifit there is no choice with the employer.
But now becasue of this new concept of CTC, employer are taking advantage of the same, because CTC has not been defined in any Statute Book/or having legal definition.
company has not considered becasue of long service of company. Earlier it was the sanerio but after implementation of Act, it became a statutory benifit and in case of statutory benifit there is no choice with the employer.
But now becasue of this new concept of CTC, employer are taking advantage of the same, because CTC has not been defined in any Statute Book/or having legal definition.
I was working for almost 6 years with a my firm in Mumbai for one of its MNC client. I was offered a CTC Salary WITHOUT mentioning any provision for Gratutiy in my CTC & in my Offer letter too.
Gratuity & Bonus will be applicable to you, Will it be part of salary, No such thing were mentioned in my CTC /Offer letter.
Now I had moved to new organization, Since I had completed more than 5 Years I had claim Gratuity from by previous firm. but my firm had denied me stating that we are not liable to pay you over an above CTC. Gratuity was part of your CTC only. you should consider gratuity as part of your salary only so No separate gratuity will be paid.
As per my understanding gratuity is applicable on completion of 5 years or 4 Years & 240days. it would be difficult to judge whether a employee will be completing 5 years of is continuous service at the time of joining.
I need your expertise & understanding on the same. ASAP.
Thanks & Regards
D. M. Shah.
From India, Mumbai
Gratuity & Bonus will be applicable to you, Will it be part of salary, No such thing were mentioned in my CTC /Offer letter.
Now I had moved to new organization, Since I had completed more than 5 Years I had claim Gratuity from by previous firm. but my firm had denied me stating that we are not liable to pay you over an above CTC. Gratuity was part of your CTC only. you should consider gratuity as part of your salary only so No separate gratuity will be paid.
As per my understanding gratuity is applicable on completion of 5 years or 4 Years & 240days. it would be difficult to judge whether a employee will be completing 5 years of is continuous service at the time of joining.
I need your expertise & understanding on the same. ASAP.
Thanks & Regards
D. M. Shah.
From India, Mumbai
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