Hello All, Would like to get your opinion. We don't have a salary structure, which due to we are paying Gratuity on Gross Salary. Now, we are going to introduce Salary Structure for all, so that our liability can be controlled. For that, would like to know
1) Can we pay as on today gratuity to members, who are eligible for gratuity?
2) Can we pay X % of Gratuity today (loss of Gratuity, due to introducing structure) and remaining at the time of actual payment, when member resigned or retired.
Seek your opinion.
From India, Ahmadabad
61) Can we pay as on today gratuity to members, who are eligible for gratuity?
2) Can we pay X % of Gratuity today (loss of Gratuity, due to introducing structure) and remaining at the time of actual payment, when member resigned or retired.
Seek your opinion.
From India, Ahmadabad
Payment of gratuity is a terminal benefit, given by employer to employee at the time of his exit from the organization on resignation, termination of service (except moral turpitude) , or retirement.
Gratuity is calculated on the basis of last drawn salary of employee.
From India, Aizawl
Gratuity is calculated on the basis of last drawn salary of employee.
From India, Aizawl
@vr
paying gratuity during the working will not resolve the issue, but will make it more complicated, as there is no provision of gratuity payment during the midway of employment, it is payable at the time of leaving the job only , today or tomorrow, there would be increments where employer can adjust the increments in other headings, keeping the present level as basic
for a handy solution, opt for group gratuity scheme of LIC, and deposit the applicable amount there, it will reduce employers burden,
restructuring of wages without discussion with employees and their consent may dent the performance of establishment, but at the time of increments, the management can do it by adding perks / allowances in place of basic hike
paying gratuity during the working will not resolve the issue, but will make it more complicated, as there is no provision of gratuity payment during the midway of employment, it is payable at the time of leaving the job only , today or tomorrow, there would be increments where employer can adjust the increments in other headings, keeping the present level as basic
for a handy solution, opt for group gratuity scheme of LIC, and deposit the applicable amount there, it will reduce employers burden,
restructuring of wages without discussion with employees and their consent may dent the performance of establishment, but at the time of increments, the management can do it by adding perks / allowances in place of basic hike
You can pay this amount as Advance towards gratuity, which would otherwise become payable to the employee at the cessation of employment and adjust this amount from the amount of gratuity to be paid at that time. If an agreement is entered into between the management and the employees in this regard, then it will be on safer side.
From India, Faridabad
From India, Faridabad
Dear colleague,
There is no legal provision to pay advance against gratuity as it is payable on last salary drawn basis on cessation of employment.
If you bifurcate your salary structure because of which basic is going to be reduced, it will be create anamoly as regards gratuity.
Explore if you can pay it as an ex- gratia now in faviour of employees but consider the service for gratuity payments in future when due. This is certainly double payment but is necessary to compensate for reduced basic arising out of restructuring wages.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
There is no legal provision to pay advance against gratuity as it is payable on last salary drawn basis on cessation of employment.
If you bifurcate your salary structure because of which basic is going to be reduced, it will be create anamoly as regards gratuity.
Explore if you can pay it as an ex- gratia now in faviour of employees but consider the service for gratuity payments in future when due. This is certainly double payment but is necessary to compensate for reduced basic arising out of restructuring wages.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
Further to my post (No.2) I wish to elaborate further for reference by the poster.
Gratuity is a statutory right of employees and cannot be denied to them on the grounds that they are being given provident fund and pension benefits. Gratuity is a statutory benefit paid to the employees who have rendered continuous service for at least five years.
It is a lump-sum amount paid to an employee based on the duration of his total service. The benefit gratuity is payable to an employee on cessation of employment either by resignation, death, retirement or termination, by taking the last drawn salary as the basis for the calculation.
Gratuity is an important form of social security and is looked at as a gesture of gratitude by the employer to the employees, paid for in monetary terms, for the services rendered by them to the organization. It is a defined benefit plan and is one of the many retirement benefits offered by the employer to the employee upon leaving his job. Gratuity payment liability of the employer tends to increase with an increase in salary and tenure of employment.
From India, Aizawl
Gratuity is a statutory right of employees and cannot be denied to them on the grounds that they are being given provident fund and pension benefits. Gratuity is a statutory benefit paid to the employees who have rendered continuous service for at least five years.
It is a lump-sum amount paid to an employee based on the duration of his total service. The benefit gratuity is payable to an employee on cessation of employment either by resignation, death, retirement or termination, by taking the last drawn salary as the basis for the calculation.
Gratuity is an important form of social security and is looked at as a gesture of gratitude by the employer to the employees, paid for in monetary terms, for the services rendered by them to the organization. It is a defined benefit plan and is one of the many retirement benefits offered by the employer to the employee upon leaving his job. Gratuity payment liability of the employer tends to increase with an increase in salary and tenure of employment.
From India, Aizawl