MagicalPickle
Gratuity for private companies
Is gratuity payment dependent on the profits of the company. Recently my company shutdown due to some funding issue and we were told to leave. Upon asking for gratuity they are saying that company is going through financial challenges blah blah blah. Shouldn't gratuity fund be a separate account for companies? Kindly help me.
12mo ago
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PeppyMarshmallow
Stealth12mo
If you’ve completed gratuity period, you should receive the amount.
MagicalPickle
Grassdoor12mo
Wat will happen if company is bankrupt? How are these cases handled?
PeppyMarshmallow
Stealth12mo
- Employers cannot refuse to pay gratuity even during bankruptcy – An organisation is liable to pay gratuity to its employees even if it declares bankruptcy. No court decree or order can restrict an employer against it.
Read more: https://groww.in/p/tax/gratuity-rules#
SparklyBurrito
Stealth12mo
If you have been in the company for more than 5 years ( or 4 years 190 days) you are eligible for gratuity.
Even if the company is filing for bankruptcy, they need to pay gratuity and usually a separate fund is created by the Company to pay gratuity.
The best you can do is to send them notices and reminders for payment of gratuity and file a complaint with the labour commissioner
MagicalPickle
Grassdoor12mo
Yes, this is what I was searching for, A separate fund. Is this compulsory for all companies?
SparklyBurrito
Stealth12mo
Not compulsory, you can look at the employee policies or financial statements. It's mentioned there, the terminology used is 'Funded' in the financial statements
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