The employer is deducting the monthly gratuity amount from the salary starting from the date of joining. However, they are requiring employees to work for 5 years before releasing the gratuity amount. Gratuity is being shown as part of the CTC.
From India, Ranchi
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From India, Ranchi
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That is the correct practice. You are eligible for gratuity only after you work for 5 years without a service break.
However, I am sure they are not actually deducting from your salary (Is it coming as a deduction on your salary slip?). There is a difference between CTC and salary.
From India, Mumbai
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2501However, I am sure they are not actually deducting from your salary (Is it coming as a deduction on your salary slip?). There is a difference between CTC and salary.
From India, Mumbai
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Though the components constituting the monthly salary under the contract of employment are part and parcel of the CTC, the expenses incurred by the employer towards any other item of the CTC cannot be actually adjusted by him against the monthly salary. Very particularly, the actuarial cost of gratuity spent by the employer is only to lessen his liability of lump sum payment when the occasion arises later. It requires no statutory contribution from the employee.
Therefore, if it is done so in actual practice, it would amount to an illegal deduction, and the poster can file a claim under Section 15(1) of the Payment of Wages Act, 1936, if his employment falls within the purview of the Act.
In any other case, a Civil Suit can be instituted against the employer for the breach of the contract of employment. Prior to this, the poster may politely appraise the employer of the legal position of gratuity payment and request him to stop the illegal deduction forthwith under his assurance of serving the establishment for not less than five years of continuous service.
From India, Salem
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Therefore, if it is done so in actual practice, it would amount to an illegal deduction, and the poster can file a claim under Section 15(1) of the Payment of Wages Act, 1936, if his employment falls within the purview of the Act.
In any other case, a Civil Suit can be instituted against the employer for the breach of the contract of employment. Prior to this, the poster may politely appraise the employer of the legal position of gratuity payment and request him to stop the illegal deduction forthwith under his assurance of serving the establishment for not less than five years of continuous service.
From India, Salem
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Kami Export - Negative Covenant in Contract of Employment.pdf (1).pdf