Dear All, Please help me with ESI - Is it applicable for a software company? I have 16 employees whose salary range is more than ₹15,001, as mentioned by the ESI representatives. Only 2 employees are below this threshold. Do I need to take this into account? Is it mandatory?
Thank you.
From India, Gurgaon
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5Thank you.
From India, Gurgaon
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if you have more thn 20 or 20 employees working with your firm then ESCI is applicable to you.
From India, Thana
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From India, Thana
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ESIC Is applicable to the establishment where the total no. of employees is 10 or more than 10 whose salary is below 15k.. reg vikram
From India, Ahmadabad
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From India, Ahmadabad
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You unit is coverable under sec. 2(12) of the ESI Act, i.e. irrespective of the employees wages, if ur unit is engaging 10 or more employees. Please start compliance immediately......
From India, Hyderabad
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From India, Hyderabad
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Dear All, Thank you for your reply. I am a little confused. I have a total of 16 employees, 14 of whom have a salary of more than ₹15,000, and I have 2 employees earning less than ₹10,000. We are interested in getting a medical claim group policy for all employees.
ESIC Requirement Inquiry
Do I need to have ESIC, especially with 10 or 20 employees?
Thank you,
Shiv
From India, Gurgaon
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ESIC Requirement Inquiry
Do I need to have ESIC, especially with 10 or 20 employees?
Thank you,
Shiv
From India, Gurgaon
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Dear Shiv, As per the ESIC Act, when ten or more employees are working with the aid of power (like in manufacturing companies where production is based on power) and receiving a salary less than ₹15,000, or when twenty or more employees are working without the aid of power and receiving less than ₹15,000, then ESIC is applicable.
1. 10 or more with the aid of power and receiving less than ₹15,000 (10 employees must have a salary of less than ₹15,000).
2. 20 or more without the aid of power and receiving less than ₹15,000 (20 employees must have a salary of less than ₹15,000).
If you have 60 employees and only 5 of them are receiving a salary less than ₹15,000, then ESIC is not applicable. However, when the number of employees exceeds 10 who are receiving a salary less than ₹15,000, ESIC becomes applicable. Once you are registered with ESIC and have been allotted an ESIC code, even if the number of employees receiving a salary less than ₹15,000 falls below 10 or 20, you are still required to deposit ESIC contributions.
Regards, Rajiv Singh
From India
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1. 10 or more with the aid of power and receiving less than ₹15,000 (10 employees must have a salary of less than ₹15,000).
2. 20 or more without the aid of power and receiving less than ₹15,000 (20 employees must have a salary of less than ₹15,000).
If you have 60 employees and only 5 of them are receiving a salary less than ₹15,000, then ESIC is not applicable. However, when the number of employees exceeds 10 who are receiving a salary less than ₹15,000, ESIC becomes applicable. Once you are registered with ESIC and have been allotted an ESIC code, even if the number of employees receiving a salary less than ₹15,000 falls below 10 or 20, you are still required to deposit ESIC contributions.
Regards, Rajiv Singh
From India
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It appears that you are not aware of the latest amendment in the ESI Act. The definition of a worker/employee has been revised to include all individuals for the purpose of coverage under the Act. However, the financial liability for contribution is limited to ₹15,000. An employee strength of 10 or more is now sufficient for this purpose. By complying, you can avoid incurring penalties and prosecution. Mr. Vsyamprasad's opinion is entirely correct. Wishing you good luck.
Regards
From India, Jaipur
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Regards
From India, Jaipur
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Dear Mr. Shiva,
Your IT company is covered under the provisions of the ESI Act with effect from 1-6-2010 onwards, due to the new amendment to section 2(12) and section 2(9) that came into effect from 1-6-2010. In your case, you have 16 employees, out of which only 2 are earning a salary below ₹15,000. Therefore, your firm falls under the Act for employing more than 10 employees, but you are only required to pay contributions for the two employees who are covered under section 2(9) of the Act.
Good luck,
Sanagapalli VR
Assistant Director (Retired)
ESI Corporation
From India, Hyderabad
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Your IT company is covered under the provisions of the ESI Act with effect from 1-6-2010 onwards, due to the new amendment to section 2(12) and section 2(9) that came into effect from 1-6-2010. In your case, you have 16 employees, out of which only 2 are earning a salary below ₹15,000. Therefore, your firm falls under the Act for employing more than 10 employees, but you are only required to pay contributions for the two employees who are covered under section 2(9) of the Act.
Good luck,
Sanagapalli VR
Assistant Director (Retired)
ESI Corporation
From India, Hyderabad
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Mr. Rajiv Singh,
The opinion expressed by you as above is not correct due to the latest amendment made to section 2(12) of the ESI Act, which came into effect on 1-6-2010. According to the latest amendment, all persons working in the factory/establishment, irrespective of their salary, will be counted for the purpose of arriving at the figure of 10 or 20. Once the required number of persons is satisfied, the establishment is covered under the Act. However, you are liable to pay contributions only for those employees earning a salary of less than Rs. 15,000 per month.
Good luck.
Regards,
Sanagapalli VR
Asst Director (Retd)
ESI Corporation
From India, Hyderabad
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The opinion expressed by you as above is not correct due to the latest amendment made to section 2(12) of the ESI Act, which came into effect on 1-6-2010. According to the latest amendment, all persons working in the factory/establishment, irrespective of their salary, will be counted for the purpose of arriving at the figure of 10 or 20. Once the required number of persons is satisfied, the establishment is covered under the Act. However, you are liable to pay contributions only for those employees earning a salary of less than Rs. 15,000 per month.
Good luck.
Regards,
Sanagapalli VR
Asst Director (Retd)
ESI Corporation
From India, Hyderabad
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Mr.sanagapalli VR Dear Sir, Thanks for your valuable suggestion and updating my knowledge about latest amendment in ESIC Coverage. Thanks & Regards Rajiv Singh
From India
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From India
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ESIC coverage is for those who are earning below ₹15,000 gross and where 10 or more employees are working in any organization or establishment; they are eligible for ESIC.
Please see the amendment provided below.
Regards,
GOPI.
From India, Hyderabad
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Please see the amendment provided below.
Regards,
GOPI.
From India, Hyderabad
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ESI Corporation Methodology
ESI Corporation could adopt this methodology as the definition of an employee under Section 2(9), where the phrase "employed for wages" is used. The Honorable Supreme Court held in the above case that, in light of this phraseology, the ESI Corporation cannot determine coverage by headcount. Instead, it should verify whether the employees fall within the prescribed wage ceiling, as stated in the proviso to Section 9 of the ESI Act. The number required to attract coverage for the factory/establishment should be 10/20.
With Regards,
Ashish K. Sharma
Team-HR
From India, Gurgaon
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ESI Corporation could adopt this methodology as the definition of an employee under Section 2(9), where the phrase "employed for wages" is used. The Honorable Supreme Court held in the above case that, in light of this phraseology, the ESI Corporation cannot determine coverage by headcount. Instead, it should verify whether the employees fall within the prescribed wage ceiling, as stated in the proviso to Section 9 of the ESI Act. The number required to attract coverage for the factory/establishment should be 10/20.
With Regards,
Ashish K. Sharma
Team-HR
From India, Gurgaon
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Dear Ashish, you are unnecessarily misleading the members. When we are in the HR line, we should update ourselves with the latest amendments and facts of various laws. In the recent amendments, ESIC has changed the definition of the factory in its definition under the Act as persons instead of employees, and the concept of power is also deleted. With this background, "Head Count" is enough for deciding the coverage of any factory/establishment. These amendments are effective w.e.f. 01.06.10.
All the best.
From India, Hyderabad
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All the best.
From India, Hyderabad
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Dear Mr. SP, The intention of resubmitting my email is not to mislead my colleagues but to discuss and clear the law point. Kindly go through between the lines and revert, because ESIC is not applicable in our case (Mr. Shiva).
Case Law Reference
In M.M. Suri & Associates Pvt Ltd v ESIC (1999 I LLJ 13 SC), the question was whether the ESI Corporation could adopt this crude methodology as the definition of employee under section 2(9) where the phrase "employed for wages" is used. The Hon'ble Supreme Court held in the above case that in the light of the above phraseology, the ESI Corporation cannot determine coverage by headcount but should rather verify whether the employees within the prescribed wage ceiling, as given in the latest Section 9 provision of the ESI Act, must be 10 or more to attract coverage for the factory/establishment.
Can anyone provide more details on this case law or any amendments in the Act made by the Parliament after this decision?
If this is the latest finding of our Supreme Court, then I think the position is clear from what I briefed earlier.
Regards,
Ashish K Sharma
Team-HR
"Courage is not the strength to go on, it is to go on when you don't have strength."
From India, Gurgaon
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Case Law Reference
In M.M. Suri & Associates Pvt Ltd v ESIC (1999 I LLJ 13 SC), the question was whether the ESI Corporation could adopt this crude methodology as the definition of employee under section 2(9) where the phrase "employed for wages" is used. The Hon'ble Supreme Court held in the above case that in the light of the above phraseology, the ESI Corporation cannot determine coverage by headcount but should rather verify whether the employees within the prescribed wage ceiling, as given in the latest Section 9 provision of the ESI Act, must be 10 or more to attract coverage for the factory/establishment.
Can anyone provide more details on this case law or any amendments in the Act made by the Parliament after this decision?
If this is the latest finding of our Supreme Court, then I think the position is clear from what I briefed earlier.
Regards,
Ashish K Sharma
Team-HR
"Courage is not the strength to go on, it is to go on when you don't have strength."
From India, Gurgaon
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ESI Applicability for Software & Hardware Company
Please help me with whether ESI is applicable for a software & hardware company. I have 126 employees, with a salary range of more than ₹15,001 for some and nearly 86 employees with a salary below ₹15,000. As per ESI regulations, we are currently paying ESI for 86 employees.
For the above 126 employees, is mediclaim mandatory? Should the company provide it or not? Kindly assist me with this query.
Thank you,
Sam.T
From India, Chennai
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Please help me with whether ESI is applicable for a software & hardware company. I have 126 employees, with a salary range of more than ₹15,001 for some and nearly 86 employees with a salary below ₹15,000. As per ESI regulations, we are currently paying ESI for 86 employees.
For the above 126 employees, is mediclaim mandatory? Should the company provide it or not? Kindly assist me with this query.
Thank you,
Sam.T
From India, Chennai
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For verifying the applicability, we should consider all the number of employees who are working under us. However, Deduction liability will only apply to those who have a Basic salary of less than Rs. 15,000, not Net pay. The rate of ESIC Contribution will be calculated based on Net Pay.
From India, Chennai
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From India, Chennai
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