Dear friend,
I wish to drive home a point here. It's better for any employer to fix basic, DA, HRA, and other allowances beforehand at the time of offer/appointment/joining in an establishment. Even when there is a CTC pattern followed in an organization, in order to avoid litigation and unrest, every detail shall be provided.
The reason I'm pressing for this is due to a possibility that some establishments keep them highly guarded or do not spell out the bifurcation to the employees, and only the take-home salary is known. This might open up the possibility of litigation. If I were an employee, I could raise a dispute stating that my take-home or gross salary consisted of Basic & DA only, and I should be paid gratuity based on this. This could be justified as I was not given a breakdown before or during my employment but only when I quit, this information is being revealed, making it arbitrary.
Furthermore, there should be a predetermined formula for DA, HRA, at least, while there need not be any formula for Basic and/or other allowances. It would be reasonable for this formula to be more or less in line with what other establishments in the same sector/trade/business/services are following.
A few guidelines were discussed by members in earlier posts on this issue, which can be consulted to establish proper guidelines.
From India, Bangalore
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1273I wish to drive home a point here. It's better for any employer to fix basic, DA, HRA, and other allowances beforehand at the time of offer/appointment/joining in an establishment. Even when there is a CTC pattern followed in an organization, in order to avoid litigation and unrest, every detail shall be provided.
The reason I'm pressing for this is due to a possibility that some establishments keep them highly guarded or do not spell out the bifurcation to the employees, and only the take-home salary is known. This might open up the possibility of litigation. If I were an employee, I could raise a dispute stating that my take-home or gross salary consisted of Basic & DA only, and I should be paid gratuity based on this. This could be justified as I was not given a breakdown before or during my employment but only when I quit, this information is being revealed, making it arbitrary.
Furthermore, there should be a predetermined formula for DA, HRA, at least, while there need not be any formula for Basic and/or other allowances. It would be reasonable for this formula to be more or less in line with what other establishments in the same sector/trade/business/services are following.
A few guidelines were discussed by members in earlier posts on this issue, which can be consulted to establish proper guidelines.
From India, Bangalore
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Dear Mr. Kumar,
As of now, the company has not established any basic salary or DA. We have been paying what was negotiated during the interview, taking into account PF and ESI (ESI if eligible).
Currently, we have employees who have been with the company for 5+ years and are still continuing. To facilitate the calculation of gratuity, we are introducing a salary breakup. However, we have encountered an issue with gratuity calculation - whether we should include gratuity as part of the salary or calculate it separately.
Thank you and best regards,
Shankar
From India, Chennai
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As of now, the company has not established any basic salary or DA. We have been paying what was negotiated during the interview, taking into account PF and ESI (ESI if eligible).
Currently, we have employees who have been with the company for 5+ years and are still continuing. To facilitate the calculation of gratuity, we are introducing a salary breakup. However, we have encountered an issue with gratuity calculation - whether we should include gratuity as part of the salary or calculate it separately.
Thank you and best regards,
Shankar
From India, Chennai
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Basic and DA should not be less than the Minimum Wages prescribed for the scheduled employment for calculation of gratuity
From India, Pune
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From India, Pune
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Better late than never. And nothing is lost since even now you have no obligation to reveal the bifurcation unless the need arises when anyone has to be settled on separation. If you would indicate the wage levels and what all should form part, we could suggest a reasonable bifurcation suitable for your entity to be in line with your contemporaries.
From India, Bangalore
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From India, Bangalore
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc