Is Gratuity a Must for IT Companies with Over 10 Employees? Let's Discuss the Rules

Is it mandatory to give gratuity in IT companies?

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In many countries, including India, the Payment of Gratuity Act mandates that companies with a certain number of employees must provide gratuity to their employees. The Act applies to all establishments employing 10 or more persons in a calendar year where gratuity is payable. Therefore, in IT companies with more than 10 employees, it is mandatory to give gratuity to employees as per the rules and regulations outlined in the Act. Gratuity is a form of retirement benefit that employers are legally required to provide to their employees as a token of appreciation for their services and loyalty to the company.

Dear Viyannar,

If the Payment of Gratuity Act, 1972 is applicable to the establishment, then it is mandatory to give the gratuity amount to the employee if they are entitled to receive the gratuity.

With regards,

R.N.Khola

Dear Viyannar,

Yes.

With Regards,

R.N.Khola

Hi Viyannar,

You should show them the Payment of Gratuity Act and the Shops and Establishment Acts. It is very clearly mentioned that the Payment of Gratuity Act is applicable to all establishments. Since your company is an IT company falling within the framework of the Shops and Establishment Act, they must agree to provide gratuity benefits to their employees. Otherwise, they are acting illegally and can be punished under the Payment of Gratuity Act.

Mohan Rao
Manager, HR

Hi,

You can find both of the mentioned acts in all Law Houses, where only law-related books are sold. These shops are available in all reputed district headquarters and all metros.

Mohan Rao
Manager HR

Dear Viyannar,

It is mandatory for your company to provide gratuity to employees.

Regards,
Jai

Dear Viyannar,

For gratuity, the employee must have completed 5 years of continuous service. Then, at the time of the employee leaving, he/she must receive their gratuity.

May I ask how long your company has been operating? Also, please verify the employee's exit time to confirm if they have completed a total of five years of continuous employment.

Best Regards,
Sajid

Mr. Mohan Rao,

Thank you for that. I will go and get those books. If any clarification is required, I will contact you. Can I have your email address, please?

Regards,
Viyannar

Hi Sajid,

Our company has been operating since 1999, and there are employees who have completed their 5-year term in the company. Therefore, it is now mandatory to proceed with Gratuity.

Thank you,
Viyannar

Hi all,

I just went through the above quotes and just want to know if someone can forward me a document file where all the rules and regulations of the Gratuity are written.

Shivani Kak
Manager HR