DELIVERED mid-2026
Separation compliance for a US-headquartered chemicals multinational
Client profile. A large multinational chemicals manufacturer, with an entity spanning its India offices, engaged us through a global payroll partner rather than direct.
The trigger. A prior advisor had told the client to switch its statutory wage base for gratuity and leave-encashment to the broader Labour-Code definition of "Wages." The client also wanted a review of five recent employee separations, after a mid-stream change to its CTC structure.
What we did. We wrote an independent compliance opinion, not an implementation. We checked the Payment of Gratuity Act 1972, the Maharashtra Shops and Establishments Act, and the Industrial Disputes Act 1947. We confirmed the state had not yet notified the Labour Codes. We reviewed each of the five separations case by case and set out a standard calculation method for future ones.
Outcomes. - The client's reversal to a "Basic only" wage base was correct. The prior advisor's Code-based recommendation was premature, since the state had not notified the Codes yet.
- We flagged two compliance gaps for follow-up: one employee's gratuity looked over-calculated, because it wrongly included a travel reimbursement and a tax-equalisation top-up. Another employee's redundancy payment may be missing a separate retrenchment payment required by law.
- We set the CTC restructuring context: the client had raised Basic pay from 45% to 51.75% of base pay, ahead of the Labour Codes' 50% wage-base floor.
Delivered through a global payroll partner.
Analysis delivered, recommendation stage
Compensation-structure review for a European medical-technology company
Client profile. A mid-size medical-technology company, with an India entity of about 25 employees across eight states, engaged us through a global payroll partner.
The trigger. Since the Labour Codes took effect, the client's compensation structure was compliant but expensive: the gratuity and leave-encashment wage base sat far above what the law required. An earlier proposed structure also had gaps — it sat exactly on the 50% wage floor with no safety margin, and used an allowance type open to challenge.
What we did. We reviewed every employment contract, every salary-increase letter, and the client's full compensation schedule. We rejected the earlier proposal and designed a new structure that targets 53% wages. That is a deliberate three-point buffer above the 50% statutory floor, instead of sitting exactly on it. We also flagged contract-hygiene issues, such as missing employee signatures on increase letters. We then set out the steps needed to roll the new structure out: consent, notice periods, and protecting employees' already-accrued gratuity.
Outcomes (projection). - Projection: cut to the separation-pay wage base of roughly 23%.
- Projection: annual gratuity-accrual saving in the low single-digit lakhs per year, recovering most of the extra cost the Labour Codes had already added.
- Projection for a long-service employee: a meaningfully lower gratuity payout under the new structure than under the old one, illustrating the savings at individual level.
- We also flagged a compliance exposure: one employee's combined employer retirement contributions exceeded the tax-free cap under the Income-tax Act 2025, creating an uncaptured taxable perquisite.
Delivered through a global payroll partner.