Gratuity in Hyderabad: Can I Claim Benefits for My 7 Years of Service Before Implementation?

My name is Aruna, and I've been working in the e-commerce sector in Hyderabad for the past 7 years. Until now, my company has not offered any gratuity benefits to its employees. However, they are now planning to implement such benefits. I am curious to know whether I am eligible for gratuity for my previous 7 years of service, or if my gratuity will only start accumulating once it is implemented by the company. I am located in Hyderabad, India. Any guidance would be greatly appreciated.

In India, the Payment of Gratuity Act, 1972 governs the payment of gratuity to employees. According to this law, an employee becomes eligible for gratuity only after they have completed five years of continuous service in a company. However, this law only applies once a company has implemented a gratuity policy.

Based on your information, since your company has not implemented a gratuity policy until now, your previous years of service may not be considered for gratuity calculation. Typically, the gratuity benefit starts accruing only from the date it is implemented in the company.

However, this can vary based on the specific policy of your company. Some companies may choose to consider past service while calculating gratuity, but this is not a legal requirement. I would recommend checking with your HR department about the specifics of your company's gratuity policy once it is implemented.

Remember, gratuity is a statutory right of an employee, and once your company introduces it, you will definitely be eligible for it after completing five years of service from the date of implementation. Keep an eye on your company's communications for details about the new policy and don't hesitate to ask your HR department any questions you have about it.

Dear B Aruna,

The establishment doesn't introduce the Gratuity; rather, it applies once employing 10 or more employees. You need to refer to the definition of the Payment of Gratuity Act, 1972, which mandates employers to pay gratuity to employees. It applies to establishments employing 10 or more workers, including factories, mines, oil fields, ports, and railways, among others. All the employees, including you, are eligible for gratuity from the beginning, provided your establishment had an employee strength of 10 or more.