Dear All,
Greetings of the day..
I am working with an IT company of 30-40 employees. We are enrolled in pf/esi act. I just want to know that is it compulsory to pay gratuity? If yes, then is it deducted from the ctc of employee every mnth? Please help me out in this.
Regards
Seema
From India, New Delhi
2Greetings of the day..
I am working with an IT company of 30-40 employees. We are enrolled in pf/esi act. I just want to know that is it compulsory to pay gratuity? If yes, then is it deducted from the ctc of employee every mnth? Please help me out in this.
Regards
Seema
From India, New Delhi
Dear Seema,
The Gratuity Act is applicable if employer engaged 20 or more workmen in any month and it has to be paid to the employee after completion of continuous service of at least 4 years and 240 days.
Of course you can make a provision while deducting partial contribution from his/her CTC.
Regards,
Janardan
From India, Mumbai
The Gratuity Act is applicable if employer engaged 20 or more workmen in any month and it has to be paid to the employee after completion of continuous service of at least 4 years and 240 days.
Of course you can make a provision while deducting partial contribution from his/her CTC.
Regards,
Janardan
From India, Mumbai
Dear friend,
Gratuity is a terminal benefit payable by the employer to an employee on the termination of his employment other than dismissal on a/c of certain proven misconduct for which a prior notice of forfeiture has been issued by the employer. The Payment of Gratuity Act,1972 is a complete code in itself on the subject-matter of gratuity payable to the employees employed in every factory, mine, oil-field, plantation and port irrespective of their number and in every shop or establishment within the meaning of any Law applicable to it and has 10 or more no. of employees and in such other establishment having 10 or more no. of employees as.notified by the Central Govt in this regard. The minimum qualifying period of service to make an employee eligible for gratuity is not less than 5 years of continuous service.However, this condition of minimum qualifying service is not applicable to the cases of termination due to death or disablement. Invariably, establishments engaged in IT and ITES are covered under States' Shops and Establishments Acts. You've also mentioned that your establishment already stands covered under the EPF Act.So, the P.G Act,1972 is applicable to your establishment and you have to pay gratuity to your employees on their termination of employment.
Contrary to periodic contribution to P.F and E.S.I, the payment of gratuity is not based on mutual contribution. It is the sole contribution of the employer without making any deduction from the earnings of the employee and of course, it can be included in the C.T.C on actuarial basis.
From India, Salem
Gratuity is a terminal benefit payable by the employer to an employee on the termination of his employment other than dismissal on a/c of certain proven misconduct for which a prior notice of forfeiture has been issued by the employer. The Payment of Gratuity Act,1972 is a complete code in itself on the subject-matter of gratuity payable to the employees employed in every factory, mine, oil-field, plantation and port irrespective of their number and in every shop or establishment within the meaning of any Law applicable to it and has 10 or more no. of employees and in such other establishment having 10 or more no. of employees as.notified by the Central Govt in this regard. The minimum qualifying period of service to make an employee eligible for gratuity is not less than 5 years of continuous service.However, this condition of minimum qualifying service is not applicable to the cases of termination due to death or disablement. Invariably, establishments engaged in IT and ITES are covered under States' Shops and Establishments Acts. You've also mentioned that your establishment already stands covered under the EPF Act.So, the P.G Act,1972 is applicable to your establishment and you have to pay gratuity to your employees on their termination of employment.
Contrary to periodic contribution to P.F and E.S.I, the payment of gratuity is not based on mutual contribution. It is the sole contribution of the employer without making any deduction from the earnings of the employee and of course, it can be included in the C.T.C on actuarial basis.
From India, Salem