Views : IT employees don’t have any benefit from this amendment.
The formula for gratuity is basic + Da × no of yrs service/26. There is no change in this formula.
But employees of IT companies such as TCS, Infosys, Wipro, Cognizant etc have very rare chance for crossing Rs 10 lakh, as they don’t have dearness allowance and their basic is only 20% of gross salary. So absolutely they don’t have any benefits from this amendment.
If formula of gratuity is changed, employees will get benefit.
In govt sector, basic and DA will be 70% of employee salary. In IT companies, it is only 20%. This is cheating done by IT companies. Govt help companies only and allow to have pay structure like this so PF/gratuity component is lesser.
In private companies, employees do not get dearness allowance. To save money, private companies introduced various other components like special allowance, work benefit compensation, variable pay etc.
This is the structure in all IT companies. That is the reason retirement benefit is less even salary is high. If employee loses job, many come to streets and i am conveying this with sadness.
I have 20 yrs in IT and 16 yrs in a leading IT company and now reached manager cadre. My gratuity accrued is on Rs 3.5 lakh. My gratuity is less because of many new fancy components added and basic is kept low.
Govt calculates PF only based on basic. So companies don’t increase basic much during increment. So if you are getting even Rs 1.5 lakh per month gross your basic will be around Rs 35K. As formula for PF/gratuity does not include other components, your gratuity will not get increased.
Minimum service for employee getting eligible for gratuity is 5 yrs. If he quit before that, companies don’t pay gratuity. They have reduced the period to 4.7 where as trade unions had asked for 3 years.
Gratuity is deducted part of your salary. In IT nearly 50% of employees quit before 5 yrs completion and company saves this amount. This years of service is not reduced which is beneficial to companies.
We can raise the issue through our union after the completion of pending 2K.
Somebody told me that Marx and others wanted employees to know all details of their employment. More important here is to make employees understand how corporates are benefited in the modern world. Employees don’t know many such tactics.
– Spring Thunder