Dear Suneetha,
As Mr. Madhu mentioned, overtime salary will not be considered for coverage decision but will be factored in for the calculation of ESI deduction. If a person's gross salary is less than Rs. 15,000, then he is eligible for coverage under ESI, and deductions should be made on his earnings, including his overtime and other earnings (except washing allowances).
Regards,
Amaravathy Srinivasan
From India, Coimbatore
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As Mr. Madhu mentioned, overtime salary will not be considered for coverage decision but will be factored in for the calculation of ESI deduction. If a person's gross salary is less than Rs. 15,000, then he is eligible for coverage under ESI, and deductions should be made on his earnings, including his overtime and other earnings (except washing allowances).
Regards,
Amaravathy Srinivasan
From India, Coimbatore
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As per the esi emp those who are getting more then Rs 6500 per menth they will not elig to get treatment in esi.
From India, Coimbatore
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From India, Coimbatore
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Dear All,
Mr. Madhu has clearly explained the scope of ESIC coverage. As rightly pointed out by him, OT is not considered for the purpose of deciding the wages for ESI coverage. However, while paying contributions, the total wages (wages + OT) must be considered for the payment of contributions.
The logic explained by ESIC officials is that OT is not a permanent part of the wage structure and can vary from month to month. In a given month, if the employee exceeds the ESI limit while considering his OT as wages for coverage, the subsequent month his wages can fall below the ESI limit, and he will come under the purview of ESI cover. This provision is given to enable the employee to enjoy uniform ESI benefits. Moreover, by paying the ESI contribution on the maximum wages (Wages + OT), the employee benefits as this will be considered for arriving at the daily wage of the employee. Hence, it is deemed as a double benefit for the employee.
M.V. KANNAN
From India, Madras
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270Mr. Madhu has clearly explained the scope of ESIC coverage. As rightly pointed out by him, OT is not considered for the purpose of deciding the wages for ESI coverage. However, while paying contributions, the total wages (wages + OT) must be considered for the payment of contributions.
The logic explained by ESIC officials is that OT is not a permanent part of the wage structure and can vary from month to month. In a given month, if the employee exceeds the ESI limit while considering his OT as wages for coverage, the subsequent month his wages can fall below the ESI limit, and he will come under the purview of ESI cover. This provision is given to enable the employee to enjoy uniform ESI benefits. Moreover, by paying the ESI contribution on the maximum wages (Wages + OT), the employee benefits as this will be considered for arriving at the daily wage of the employee. Hence, it is deemed as a double benefit for the employee.
M.V. KANNAN
From India, Madras
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Dear Mr. Madhu T. K.,
Is it applicable for shops and establishments as well? And what if the establishment is not a manufacturing unit, meaning a service unit? I am in agreement with your answer, and I have the same understanding, but when I confirmed with reliable resources, it was refused. Can you please provide me with any notification regarding the same or any reference for the same?
Regards,
Hardik
From India, Chaklasi
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Is it applicable for shops and establishments as well? And what if the establishment is not a manufacturing unit, meaning a service unit? I am in agreement with your answer, and I have the same understanding, but when I confirmed with reliable resources, it was refused. Can you please provide me with any notification regarding the same or any reference for the same?
Regards,
Hardik
From India, Chaklasi
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DEAR FRIENDS As per the factory act 1948 the company have to pay esi to net amount which is received by the employee. duing the audit they will match the esi with emp net salary only.
From India, Coimbatore
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From India, Coimbatore
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Dear Suneetha,
In this case, I do agree with Mr. Pawan. The person is getting a salary of 10000/- per month, which means it is his CTC at which he was appointed. According to the ESIC Act, anyone who is getting a gross salary less than 15000/- will be covered under ESI. Now, he does overtime and earns an extra 7000/-, but he is still eligible for deduction because what if he does not do overtime next month and gets a salary according to 10000/-. The person is covered under ESIC until his CTC exceeds 15000/-.
Thanks,
Amit
Asst. Manager HR
From India, Amritsar
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In this case, I do agree with Mr. Pawan. The person is getting a salary of 10000/- per month, which means it is his CTC at which he was appointed. According to the ESIC Act, anyone who is getting a gross salary less than 15000/- will be covered under ESI. Now, he does overtime and earns an extra 7000/-, but he is still eligible for deduction because what if he does not do overtime next month and gets a salary according to 10000/-. The person is covered under ESIC until his CTC exceeds 15000/-.
Thanks,
Amit
Asst. Manager HR
From India, Amritsar
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ESI rules are the same for factories and establishments. The only difference is with regard to the coverage of the organization. For the coverage of a factory, only 10 employees are required, whereas for the coverage of a commercial establishment other than a factory, at least 20 persons are required. The ESI has instructed the state government to make it applicable to all 'establishments' employing 10 employees, thereby making it common for both factories and establishments.
Dear Amit,
CTC is a concept recently developed and it has no legal validity. Therefore, don't consider CTC for any calculations related to ESI, PF, or other statutory matters.
Regards,
Madhu.T.K
From India, Kannur
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Dear Amit,
CTC is a concept recently developed and it has no legal validity. Therefore, don't consider CTC for any calculations related to ESI, PF, or other statutory matters.
Regards,
Madhu.T.K
From India, Kannur
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Dear Suneetha,
The ESIC Act clearly states that the ceiling amount for deducting ESI from employees is INR 15,000 per month. For those employees earning within this limit, ESI deductions are necessary. If employees receive overtime (OT) pay, ESI should be deducted separately on the OT amount. The OT amount does not affect the salary determination for an employee. The decision on ESI coverage can be based on the salary amount alone. It is advisable not to focus solely on OT.
Lakshmikanth.M
HR Dept
From India, Bangalore
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The ESIC Act clearly states that the ceiling amount for deducting ESI from employees is INR 15,000 per month. For those employees earning within this limit, ESI deductions are necessary. If employees receive overtime (OT) pay, ESI should be deducted separately on the OT amount. The OT amount does not affect the salary determination for an employee. The decision on ESI coverage can be based on the salary amount alone. It is advisable not to focus solely on OT.
Lakshmikanth.M
HR Dept
From India, Bangalore
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Dear All,
As Mr. Madhu has pointed out, employees are covered under ESI up to Rs. 15,000/-, and only if they earn more than Rs. 15,000/-, say Rs. 15,001/-, then they are outside the purview of ESI coverage.
Regards,
M.V. KANNAN
From India, Madras
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As Mr. Madhu has pointed out, employees are covered under ESI up to Rs. 15,000/-, and only if they earn more than Rs. 15,000/-, say Rs. 15,001/-, then they are outside the purview of ESI coverage.
Regards,
M.V. KANNAN
From India, Madras
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Dear Mr. Ponraji,
If you are providing uniforms to your employees and paying a reasonable amount for washing allowance, that is exempt from paying ESI contribution. In our concern, we have been paying Rs. 240 per month, and on that, we have not been paying ESI.
This is for your information.
G.K. Manjunath, Manager-HR
From India, Bangalore
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If you are providing uniforms to your employees and paying a reasonable amount for washing allowance, that is exempt from paying ESI contribution. In our concern, we have been paying Rs. 240 per month, and on that, we have not been paying ESI.
This is for your information.
G.K. Manjunath, Manager-HR
From India, Bangalore
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