Applicability Of Gratuity And PF - CiteHR
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Hello Everyone,

I am not sure whether this topic has been discussed before.


I am working for a company which started in 2007. I had joined the company in August 2008 and in August 2009 we had about 10 employees. In April 2011 we were informed by the management that from now on gratuity will be applicable to us and it is being shown as part of the CTC. Is this right? I also want to know as to whom all it is applicable, because I read that I am applicable for gratuity only after completion of 5 years and if my salary or emoluments are less than 10000 in a month.


For the last 4 years we were informed that PF is not applicable to our organization since the employee strength is less than 20. This year we are being told that PF is applicable to us even though employee strength is 10 and also the management tells us that both our contribution and employer contribution will be shown as part of our CTC. Is this right? and whether we are really eligible for PF and if it applicable then should we ask the management also for previous years PF

Hoping for some solutions

Mr Rajiv,

Since your establishment having strength less than 20, PF is not applicable as on date. If your Establishment wish to extend the facility, they can extend to their members through Voluntary Coverage. It seems that the same is adopted by your management. Even voluntary coverage also, once selected to cover the establishment, cannot go back. OK. It is the benefit of the members.

Gratuity is also a welfare measure for employees. The Act says it will applicable once any member completes his service in that establishment 5 years. But the Act never said that employer cannot implement the Scheme to members before their completion of their 5 years service with any establishment. OK. This is also for your benefit.

One thing is very clear. CTC cannot apply to members those whose emoluments are less than Minimum wages in that particular schedule employment. Pl go through your schedule employment wages. Also ESI Limit is up to Rs.15,000/- EPF limit is up to Rs. 6,500/-. Benefits from Labour Legislation's also restricted up to Rs.6,500/-. So if your take home emoluments are more than Rs.6,500, CTC may apply. If you feel still doubt, please contact your nearest Labour Official for your grievance.

Tirupathi Raju/Advocate

Advisor-Labour Laws

Dear Members,
Sub : Gratuity
Pl. clarify - while Calculating Gratuity to be Paid to employees, we have salary structure as Basic
+ HRA + Conveyance .Then the Gratuity to be Paid for - Total of Basic salary + HRA OR Basic only OR Total of all Three ?
Pl. offer your Solutions
Thanks & Regards,

Thank you Mr. Tirupathi Raju for the solutions
But I can't understand as to what happens to amount deduct from me month on month when there is no gratuit account which has been opened in my name. I think I am relatively better off investing same amount in some other pension fund with better return and withdrawal also non taxable

Hi, our company was established in 2006 and we have been covered under PF from the inception. However, we are now looking at introducing Gratuity - i have some queries around this (1) if i have offices in multiple locations, is it ok to register only at the place where our Head office is located? (2) who do we need to register with and is there any where from where we can get details of the process / procedure (3) how long does it take to bring this into effect? would appreciate responses..
Dear Tirupathi Raju
Gratuity is eligible for complete of 5yrs.....if some body is resign on 20th Apr 2012 giving 60 days notice but his 5yrs will be completed by 19th june 12 and 19th june will be his last day of job in that case is gratuity will applicable for claim or to be wait for resignation till 19th june-12 i.e. completion of 5yrs
Pls help/guide urgently.......

Hello Everyone,
To add to my question now my management tells me that PF will be complusory for us as we are subsidiary of the parent company. If that is the case then should not the company pay for previous years PF as well

I worked for a private educational institution for 22 years, without break of service. Recently, I joined in another institution. How to claim gratuity from the previous service? and what are the procedures?
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