as per gratuity act 1972  any person is eligible for gratuity only after completing 5 year of service in a particular organisation and there is no any deduction regarding gratuity from salay of emplyoee.

As per my view you can claim CPF but not Gratuity as you have not completed 5 years of your service in your current company...

From various posts it is understoof sooner or later employers/HR personnel yieled and pay.

You have to drill sense into the heads.

Employee should apply rapport, goodwill,and exceptional levels of reasoning, persuasion, persisitence, negotiation skills and resolve the matter in his favor while in employment and avoid litigation.

Employee should not limit himself to line management and HR and must approach good offices of appointing authority,MD,Chairman, Company Secretary too, and must not shy to approach other good offices of Labor Commissioner, Controlling Authority of Gratuity { which maybe ALC in your case}, labor minister, and institution of print and electronic media, police, NGO's, Social-legal-public forums, trade unions,regulators, controllers,etc...

PF and gratuity are tools of social security and covered under social security acts.

Gratuity Act is statue and gratuity is statutory right of employee. It is legal obligation of each employer. Company adjusts it in its books.

Before 5 years of vintage of employee company does not have to adhere to the statutory obligation.

However company starts deducting from day 1, and retains it for a statutory payment which shall become due on company after 5 years???????????

CTC is annual package, remuneration package. What else it is?

Gratuity is terminal benefit, and it should not have any burden or bearing or reference to annual pay package/ remuneration package.

Employers with good HR practices offer superannuation policies in addition to Gratuity to attract employees to remain with them.

Employer has to bear the total cost and must refrain from adding the gratuity in remuneration package offered to employee.

Payment of Gratuity act is attracted if employee completes 5 years of service as per employer’s point of view so why and how employer and his team of HR adds gratuity in remuneration package/CTC. The sensible HR personnel advices to pay the amounts as tax free Ex Gracia if employee leaves before 5 years.

The employer has to pay the cost of buying the insurance from policy from LIC, to create fund for payment of gratuity and the amounts paid by employer are not premium and should not cost to employee. LIC pays interest on this amounts paid by employer. The amount remains in company’s a/c.

No employer shall be registered under the section of the act until or unless employer has taken insurance.

Employee has not completed 5 years and how can company start deducting/collection contribution for gratuity????? This is in contravention to Payment of Gratuity Act. This can be termed as fraud {minor or major}.

Employee has not received this amount and company has started deductions??????

Employee should collect the amounts from employer by formulae of gratuity calculation and should not leave a penny. After 5 years by applying the formulae of gratuity calculation employee shall get more money compared to monthly contribution collected from employee. Company has to pay by gratuity formulae.

Would company showing collection on monthly basis agree to pay double amount after 5 years?

Payment of Gratuity Act, 1972

Section: 4A
Compulsory insurance

(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:

(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).

As per various posts IT companies and other companies pay as tax free Ex gracia in FNF settlement the amounts equivalent to gratuity/month reflected in remuneration package/CTC sheet. As per some posts IT companies offered gratuity after completion of 2 years. It companies were smart to understand that majority of the employees may be difficult to be retained for longer periods and attractive offers be made, and probably some could foresee that they themselves may not last long. Many companies have gone with the wind.

It is for last fey years IT companies which were pampered by the govt. and granted exemptions from various labor laws started practice of adding gratuity in remuneration package/CTC. Some companies even ask to tender FD’s with lien in favor of employer, deposit original testimonials with employer for unlimited period of time. Such employers litter nuisance to the unimaginable proportions. The ideas emerged that create a scene where whatever could be deducted from employee and added to savings and profits, and it was done. Performance pay, performance bonus was added and then deducted

One school of thought wanted to count every thinkable nickel and flaunt it to the employee, however only those nickels and pennies which are legally possible can be added in remuneration package/CTC of the employee.

Employer should include only the amounts which are payable to employee in CTC/remuneration package without any strings, and should be paid even if employee separates before 5 years.

Tomorrow employers may claim that renewal fee of various licenses is to be included in remuneration package/CTC sheet of the employee. It can’t be allowed. It should be termed illegal, unlawful, illegitimate, bad practice, unfair means.

It is responsibility of the HR personnel not to misguide the promoters of the company and to reject the illegitimate demands of the promoters. After all HR personnel prepare the remuneration package/CTC sheet.

Now HT personnel may have their own definition for CTC e.g.

If you are employee, what you cost to company; directly or indirectly; what company spends because of employing you.

And/or

Money given to you with money spent because of you.

Now you shall wonder if you are employed what you shall get in your hands on your pay day as your assured salary/wages.

Answer is simple : basic { basic+DA} and allowances { incentives, bonus, Vehicle/medical/conveyance/LTA-LTC/special/phone etc} which are calculated as % of basic { basic+DA}of course after tax deductions. These are part of your in hand salary hence may be part of CTC.

If companies and for that matter HR personnel and master craftsmen conceive an idea that why not to include office space rent, office phone bill, and if office is near a golf course add amounts for the view of golf course in the CTC of employees who sit facing golf course, cable connection in reception, internet charges for Google search,office gym, Italian marble in reception area, compensation and privileges of IIM educated / Foreign returned director-GM who shall be your leader/under whom you shall get the privilege of working………………….and what not.

And these craftsmen shall not spare even statutory benefits……………….

And employees shall work for 12 hours or so……….all days in week………even on holidays……….travel overnight and work in morning…………without any OT

So what should an employee do……….Slap a case and tame and shame the offenders.

Exemption granted to IT companies in Karnataka have been withdrawn and now Labor Laws shall be applicable as earlier.

Rise and unite and form communities and oppose such nuisance.

Employees form a very big vote bank. If employees unite Govt. and machinery shall act.

@ Pandi

You may drill sense into the team of personnel denying payment and succeed in getting the payment as tax free amount in FNF statement/settlement and obtain Form16 as per FNF statement.

IT employees had initiated an effort to bring the grievances in the knowledge of IT minister and PM at:

IT/BPO Voice of India | Facebook

It is said that
UNITES Professionals

Is the premium union for IT guys.

Yu may try them.

However it shall be better if now IT employees ask for {in writing}o/o Labor Commissioner and Employer {MD, Chairman, Promoter} to form Grievance Redressal Committee to resolve the disputes in one month, in line with Sec 9C of Industrial Disputes (Amendment) Act, 2010.Having equal number of members from employees and Employer and Chairman on rotation basis from employees and Employer every year.