We have around 130 workmen, and due to the heavy workload, they are doing overtime every day, resulting in a monthly salary of around 27K to 28K. However, as this situation is temporary, I want them to continue in ESI. Will there be any problem if I pay their ESI contributions even though they are exceeding the limit?
From India, Hyderabad
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1From India, Hyderabad
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Certainly, you cannot exclude an employee from ESI if the salary exceeds Rs 21,000 due to overtime wages. For coverage and non-coverage, the overtime wages will not be counted; however, for ESI contribution, the overtime wages will be considered. Therefore, you should pay ESI on the gross salary, including overtime wages, such as Rs 27,000 or Rs 28,000, and continue to include them under the scheme.
Remember: For coverage, the OT wages will not be counted, but for contribution, it will be included.
From India, Kannur
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Remember: For coverage, the OT wages will not be counted, but for contribution, it will be included.
From India, Kannur
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ESI contribution rates lowering.pdf
Employee Benefits.doc