Dear Atomz,
This is a useful update on contribution. Rule 52 does not really fix any minimum wage limit for an employee to be eligible for ESI benefits, but it only exempts the employee from paying his share of the contribution if his average daily wage is Rs 100/- or less. However, the employer is liable to pay 4.75% of such a daily average wage. That means the Act retains the employer's liability irrespective of the wage of the employee. Nevertheless, this is a useful update from your side.
B. Saikumar HR & Labour Law Consultant Chipinbiz Consultancy Pvt. Ltd Mumbai Tel: 022-28324234
From India, Mumbai
Acknowledge(0)
Amend(0)
57This is a useful update on contribution. Rule 52 does not really fix any minimum wage limit for an employee to be eligible for ESI benefits, but it only exempts the employee from paying his share of the contribution if his average daily wage is Rs 100/- or less. However, the employer is liable to pay 4.75% of such a daily average wage. That means the Act retains the employer's liability irrespective of the wage of the employee. Nevertheless, this is a useful update from your side.
B. Saikumar HR & Labour Law Consultant Chipinbiz Consultancy Pvt. Ltd Mumbai Tel: 022-28324234
From India, Mumbai
Acknowledge(0)Amend(0)
Dear sir,
Good afternoon.
Recently, I have left my old job and I want to transfer my P.F account to my new company. Please advise me on how I can do that because my old company has not supported me in this matter. Your help and advice would make me more comfortable.
Thanks & regards,
Chetan Tanna
Gandhidham, Kutch.
Gujarat - Pin 370001
09429947978
09979797404
From India, Mumbai
Acknowledge(0)Amend(0)
Good afternoon.
Recently, I have left my old job and I want to transfer my P.F account to my new company. Please advise me on how I can do that because my old company has not supported me in this matter. Your help and advice would make me more comfortable.
Thanks & regards,
Chetan Tanna
Gandhidham, Kutch.
Gujarat - Pin 370001
09429947978
09979797404
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Chetan, You need pf no and date of leaving service of previous employer and need to fill up the form 13 to transfer the pf account. Regards, sukanta.
From India, Calcutta
Acknowledge(0)Amend(0)
From India, Calcutta
Acknowledge(0)Amend(0)
Dear Sukanta,
Atomz informed you about the minimum wages for ESIC. However, you should follow the rules of minimum wages. According to the minimum wages for skilled persons, the minimum wage should be Rs. 178.50 per day. So, monthly it would amount to around Rs. 4700/-.
From India, Pune
Acknowledge(0)Amend(0)
Atomz informed you about the minimum wages for ESIC. However, you should follow the rules of minimum wages. According to the minimum wages for skilled persons, the minimum wage should be Rs. 178.50 per day. So, monthly it would amount to around Rs. 4700/-.
From India, Pune
Acknowledge(0)Amend(0)
Regarding the ESI Act, it must not provide any minimum gross wages for deduction of the ESI, because if it does then it would be against the Minimum Wage Act.
But ESI act says:
Sec 42(1) : "No employee’s contribution shall be payable by or on behalf of an employee whose average daily wages during a wage period are below such wages as may be prescribed by the Central Government."
Under Rule 52 of ESI Central Rules, 1950 the employee earning upto Rs. 100/- a day as wages are exempted from payment of their part of contribution .
Being said that I must give one more point to think about:
if an employee is beyond the limit of ESI (earning more than Rs. 15000) would the establishment be liable under Industrial Dispute Act with regard to that employee?
Stay Cool
Atom
From India, Phagwara
Acknowledge(0)Amend(0)
But ESI act says:
Sec 42(1) : "No employee’s contribution shall be payable by or on behalf of an employee whose average daily wages during a wage period are below such wages as may be prescribed by the Central Government."
Under Rule 52 of ESI Central Rules, 1950 the employee earning upto Rs. 100/- a day as wages are exempted from payment of their part of contribution .
Being said that I must give one more point to think about:
if an employee is beyond the limit of ESI (earning more than Rs. 15000) would the establishment be liable under Industrial Dispute Act with regard to that employee?
Stay Cool
Atom
From India, Phagwara
Acknowledge(0)Amend(0)
That's exactly what I said. Rule 52 deals with only a situation where an employee is exempted from paying contribution but does not fix any minimum limit for his eligibility for ESI benefits so that the employer will also be free from the liability of paying contribution. If so, it not only militates against the Minimum Wages Act but also against the ESI Act itself.
As regards the implications under the Industrial Dispute Act, I must say that the definition of 'employee' under the ESI Act and the definition of 'workman' under the Industrial Disputes Act are different. Each act has to be judged independently, and one cannot import the definition of 'employee' under the ESI Act into the Industrial Disputes Act to exclude him from the purview of the Industrial Disputes Act merely because he draws wages in excess of Rs. 15,000/- per month.
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
022-28324234
From India, Mumbai
Acknowledge(0)Amend(0)
As regards the implications under the Industrial Dispute Act, I must say that the definition of 'employee' under the ESI Act and the definition of 'workman' under the Industrial Disputes Act are different. Each act has to be judged independently, and one cannot import the definition of 'employee' under the ESI Act into the Industrial Disputes Act to exclude him from the purview of the Industrial Disputes Act merely because he draws wages in excess of Rs. 15,000/- per month.
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
022-28324234
From India, Mumbai
Acknowledge(0)Amend(0)
To all seniors,
I have recently taken up a job in the generalist HR role and I wanted to understand if there is an option where an employee can have both PF and ESI deducted from their salary. I mean, if an organization already has the system of PF deductions, what benefits would be added by giving ESI deductions too?
Looking forward to your response.
Thanks
From India, Jaipur
Acknowledge(0)Amend(0)
I have recently taken up a job in the generalist HR role and I wanted to understand if there is an option where an employee can have both PF and ESI deducted from their salary. I mean, if an organization already has the system of PF deductions, what benefits would be added by giving ESI deductions too?
Looking forward to your response.
Thanks
From India, Jaipur
Acknowledge(0)Amend(0)
Dear All,
Thank you, Mr. Atomz and Mr. Saikumar, for the correct inputs.
So it is very much right that ESIC is not the authority which governs or dictates the minimum wages. It is the different body "Labour Department." Am I right?
Now any organization (employer) comes under the purview of ESI act (10+ employees) should contribute 4.75% of the salary paid except on the salary paid more than 15000/- to his employees. Employees whose salary exceeds 100 Rs per day and whose salary is below 15000/- per month should share 1.75% towards the ESI contribution. Am I right?
Further, the same organization comes under the PF act if the number of employees exceeds 20+. And now the minimum wages act comes into play, which is different for different areas/states. I hope I am right.
Now, if the organization has less than 10 employees, then whether the minimum wages act is applicable? (which is strictly applicable once the PF act is applicable).
Looking forward to your feedback.
Abhinandan.
From India, Hubli
Acknowledge(0)Amend(0)
Thank you, Mr. Atomz and Mr. Saikumar, for the correct inputs.
So it is very much right that ESIC is not the authority which governs or dictates the minimum wages. It is the different body "Labour Department." Am I right?
Now any organization (employer) comes under the purview of ESI act (10+ employees) should contribute 4.75% of the salary paid except on the salary paid more than 15000/- to his employees. Employees whose salary exceeds 100 Rs per day and whose salary is below 15000/- per month should share 1.75% towards the ESI contribution. Am I right?
Further, the same organization comes under the PF act if the number of employees exceeds 20+. And now the minimum wages act comes into play, which is different for different areas/states. I hope I am right.
Now, if the organization has less than 10 employees, then whether the minimum wages act is applicable? (which is strictly applicable once the PF act is applicable).
Looking forward to your feedback.
Abhinandan.
From India, Hubli
Acknowledge(0)Amend(0)
Minimum Wage Act is always applicable whether the establishment is under EPF or ESI. Now, why is the EPF department strict about it? This is because of the court ruling that "PF must be deducted on minimum wages." However, on the other side of this issue, the EPF department cannot enforce the employer to pay Minimum Wages because they do not have the authority to do so.
For instance, if a worker's salary is 3000 per month, the EPF department cannot enforce the employer to pay the worker 4050 (if the minimum wage is 4050). They can only enforce the employer to make the PF deduction up to 3000.
Note: The Punjab & Haryana High Court has ruled against the EPF department for deducting EPF up to minimum wages. The strict rule of EPF deduction is suspended until further notification.
Stay Cool Atom
From India, Phagwara
Acknowledge(0)Amend(0)
For instance, if a worker's salary is 3000 per month, the EPF department cannot enforce the employer to pay the worker 4050 (if the minimum wage is 4050). They can only enforce the employer to make the PF deduction up to 3000.
Note: The Punjab & Haryana High Court has ruled against the EPF department for deducting EPF up to minimum wages. The strict rule of EPF deduction is suspended until further notification.
Stay Cool Atom
From India, Phagwara
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.