Please advise employer deduct gratuity from employee salary every month - it is under act?
From India, New Delhi
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nathrao
3251

Employer is not authorized to deduct any amount from employee pay on account of gratuity. The employer has to cater for likely gratuity payments to employees as per their entitlement as and when due. They can take out an LIC policy or obtain coverage from another insurance company to fulfill due amounts to entitled employees. However, deducting any amount from an employee on account of gratuity is illegal.
From India, Pune
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Dear colleague,

It is outright illegal to make deductions from employees' salaries when the responsibility squarely falls on the employer to pay them when due and eligible, either from their own funds or through linkage with LIC. I urge you to make a representation to the top person and bring to their attention this grave violation of legal obligations. Kindly request them to refrain from this practice and also to refund any amounts that have already been illegally deducted.

Regards,
Vinayak Nagarkar
HR Consultant

From India, Mumbai
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Dear Hmlata Are you in CTC regime? If yes. Please check it must be notional credit and debit. Shailesh Parikh 99 98 97 10 65 Vadodara
From India, Mumbai
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Dear Contributors,

To clarify, an employer cannot deduct gratuity contributions from the employee's earnings; however, showing the gratuity component as a separate element (benefits) to compute the Total Cost to the Company (TCTC) is a legitimate practice adopted by most companies. There is no logic to it; it is just like adding froth to beer, inflating the total compensation by including benefits such as gratuity, insurance, etc., to make it appear more attractive.

Regards, Rahul Chhabra

From India, Delhi
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Dear Colleagues,

Gratuity does form part of CTC, which is understandable. If the legal responsibility is put on the employer, where is the need for either deduction or notionally showing it as a debit and credit? It is forthright ridiculous.

Regards,
Vinayak Nagarkar
HR Consultant

From India, Mumbai
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Under Payment of Gratuity Act 1972, payment of Gratuity is responsibility of employer and no contribution from employee.
From India, Madras
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NO-Employer can’t deduct from the employee. Insurance can be taken to handover the burden is the wise way to manage .I generally advice to the employer to do so. Brij Pathak Manger HR
From India, Vadodara
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Gratuity is given/paid by the employer to his/her employee for the services rendered by him during the period of employment. It is usually paid at the time of retirement, but it can be paid before, provided certain conditions are met.

A person is eligible to receive gratuity only if he has completed a minimum of five years of service with a company/organization. However, it can be paid before the completion of five years in the event of the death of an employee or if they have become disabled due to an accident or disease.

Business owners may engage in unethical practices due to their pursuit of profit.

Regards,
Mohan Nair

From India, Mumbai
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Kindly check, is it CTC or Gross Salary? Gratuity is the part of CTC.
From India, Delhi
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