Dear all senior members,
If the factory is registered under the Factories Act 1948, are PF and ESI to be deducted on arrear wages?
a) If wage revision is due to an increase in the minimum wage by the state government from a back date.
b) If wage revision is due to an increment from a back date.
Please answer with supporting material such as the section number of the act or any judgments by any court of law. This is very serious in terms of finances.
Regards,
Manish
From India, Mumbai
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5If the factory is registered under the Factories Act 1948, are PF and ESI to be deducted on arrear wages?
a) If wage revision is due to an increase in the minimum wage by the state government from a back date.
b) If wage revision is due to an increment from a back date.
Please answer with supporting material such as the section number of the act or any judgments by any court of law. This is very serious in terms of finances.
Regards,
Manish
From India, Mumbai
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Dear Akhil, IN ESI ACT where it is mentioned?? my Local inspector is saying that Arrear wage is a wage and thus ESI should be deducted! regards Manish Gupta
From India, Mumbai
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From India, Mumbai
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Dear Manish,
Mr. Akhil is correct as ESI is not to be deducted from arrears wages. We have contacted the ESIC Noida regional office in Sector 57, and its director, Mr. Sanjay Sinha, has informed us that ESI should not be deducted from arrears wages.
Regards,
Deep
From India, Delhi
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Mr. Akhil is correct as ESI is not to be deducted from arrears wages. We have contacted the ESIC Noida regional office in Sector 57, and its director, Mr. Sanjay Sinha, has informed us that ESI should not be deducted from arrears wages.
Regards,
Deep
From India, Delhi
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Yes, sir. Even our Joint Director in Andhra Pradesh has informed us that there is no need to deduct ESIC contributions on arrears. However, we are still deducting as nobody will provide it in writing, and there is no clarity in the Act.
Regards,
Prasad SBR
From India, Pune
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Regards,
Prasad SBR
From India, Pune
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Dear Mohan Pal and Prasad,
I had the same view on ESI that "it should not be deducted on arrear wage," but where is it mentioned in the act or any notification in this regard? Retired Director ESIC, Dr. Kheterpal, also mentioned that ESIC should not be deducted on arrear wage but failed to mention the section number in the act.
Mr. Prasad, you know how much money we are wasting of the employees as well as the employer because we are not clear in this regard. We have to find the exact rule!!!
Regards,
Manish Gupta
From India, Mumbai
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I had the same view on ESI that "it should not be deducted on arrear wage," but where is it mentioned in the act or any notification in this regard? Retired Director ESIC, Dr. Kheterpal, also mentioned that ESIC should not be deducted on arrear wage but failed to mention the section number in the act.
Mr. Prasad, you know how much money we are wasting of the employees as well as the employer because we are not clear in this regard. We have to find the exact rule!!!
Regards,
Manish Gupta
From India, Mumbai
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I want to know about admin job profile. and what is the deduction of canteen & transport from employees salary?
From India, Kolhapur
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From India, Kolhapur
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hi all esic would be deducted on gross salary wheather an arrear would be added on it.so guys why r u worried about that.
From India, New Delhi
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From India, New Delhi
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Hi All,
Section 2(9) and Section 2(22) stipulate certain items for forming part of wages for the purpose of coverage and payment of contributions. In the said list, arrears are not included, and hence contributions need not be paid on arrears.
Kanna Vijayakumar
From India, Secunderabad
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Section 2(9) and Section 2(22) stipulate certain items for forming part of wages for the purpose of coverage and payment of contributions. In the said list, arrears are not included, and hence contributions need not be paid on arrears.
Kanna Vijayakumar
From India, Secunderabad
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Sec. 2(22) reads as follows:
(22) "wages" means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorized leave, lockout, strike which is not illegal, or layoff, and other additional remuneration, if any, paid at intervals not exceeding two months, but does not include:
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any traveling allowance or the value of any traveling concession;
(c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(d) any gratuity payable on discharge.
In the above definition, the term "other additional remuneration, if any," what does it indicate?
In a general view, also the arrears paid to the employee are also considered as Wage/Salary. Due to some administrative problems, if the company is paying his/her annual increment after two or more months from his/her annual increment due date. In such cases, the amount paid to him is wage or not? If wage, then it should be deducted. If not, there may be a notification from ESIC.
Regards,
Prasad
From India, Pune
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(22) "wages" means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorized leave, lockout, strike which is not illegal, or layoff, and other additional remuneration, if any, paid at intervals not exceeding two months, but does not include:
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any traveling allowance or the value of any traveling concession;
(c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(d) any gratuity payable on discharge.
In the above definition, the term "other additional remuneration, if any," what does it indicate?
In a general view, also the arrears paid to the employee are also considered as Wage/Salary. Due to some administrative problems, if the company is paying his/her annual increment after two or more months from his/her annual increment due date. In such cases, the amount paid to him is wage or not? If wage, then it should be deducted. If not, there may be a notification from ESIC.
Regards,
Prasad
From India, Pune
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In case the management took a decision in writing or in an agreement with the employees' union and gave any arrears, the arrears belonging to the date of such decision will not be taken into account for the purpose of ESI.
If the decision was taken earlier and the arrears are paid now, then such arrears will attract ESI.
Hence, the employer has to prove himself regarding these evidences.
From India, Hyderabad
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If the decision was taken earlier and the arrears are paid now, then such arrears will attract ESI.
Hence, the employer has to prove himself regarding these evidences.
From India, Hyderabad
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