Dear All,
My question is very clear. If a power-using organization is employing 10 or more persons and their salary is less than Rs. 10,000/-, then the organization should be covered under the ESIC Act of 1948. But my question is, if a power-using organization is employing more than 10 employees and only 5 employees' salary is less than Rs. 10,000/- (as per the limit) and all others are getting more than Rs. 10,000/-, then should the organization be covered under the ESIC Act or not? I request all of you to clarify this instead of just saying yes or no.
Thank you,
Sinju George
From India
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My question is very clear. If a power-using organization is employing 10 or more persons and their salary is less than Rs. 10,000/-, then the organization should be covered under the ESIC Act of 1948. But my question is, if a power-using organization is employing more than 10 employees and only 5 employees' salary is less than Rs. 10,000/- (as per the limit) and all others are getting more than Rs. 10,000/-, then should the organization be covered under the ESIC Act or not? I request all of you to clarify this instead of just saying yes or no.
Thank you,
Sinju George
From India
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Hi!
The ESI coverage is for the establishment, and the coverable gross salary limit is Rs. 10,000/- Even if all the employees earn more than Rs. 10,000/-, the establishment will still remain under coverage. The company, as a principal employer, is responsible for the service provider/contractor's employees if they earn less than Rs. 10,000/-.
The coverage will cease only upon the legal closure of the company, such as winding up, merger, or amalgamation.
R. Muralitharan
From India, Madras
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The ESI coverage is for the establishment, and the coverable gross salary limit is Rs. 10,000/- Even if all the employees earn more than Rs. 10,000/-, the establishment will still remain under coverage. The company, as a principal employer, is responsible for the service provider/contractor's employees if they earn less than Rs. 10,000/-.
The coverage will cease only upon the legal closure of the company, such as winding up, merger, or amalgamation.
R. Muralitharan
From India, Madras
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Dear Friend,
ESI (Employee State Insurance)
Table of Contents
§ Employee State Insurance (ESI) FAQs
§ What is ESI?
§ What are the rates for contribution (deduction) to ESI?
§ What is ESI Gross Salary?
§ What are the other rules governing ESI?
§ What are the various ESI reports?
§ See also:
Employee State Insurance (ESI) FAQs#
What is ESI?#
ESI refers to Employee State Insurance. This is an insurance scheme run by the government. In this scheme, an employee contributes part of his salary as an insurance premium. Along with the employee, the employer also contributes to the scheme. The government collects this money and operates ESI hospitals.
§ whenever an employee falls sick, he can go to these ESI hospitals and avail free treatment.
§ ESI contribution is mandatory for all employees who draw a gross of less than 10000/-
What are the rates for contribution (deduction) to ESI?#
§ For employees, ESI deduction rate is 1.75% of the ESI Gross salary.
§ For employer, ESI contribution is at the rate of 4.75% of the ESI gross salary.
What is ESI Gross Salary?#
Generally all the income components paid to an employee is considered for ESI Gross computation.
What are the other rules governing ESI?#
ESI contribution stops when the employee's gross income crosses Rs. 10000/-.
§
§ This stoppage of ESI cannot happen in any month. The changeover from ESI-deduction to no-ESI-deduction can happen only in 3rd (March) or 9th (September) month only. i.e. even if an employee's salary crosses, 10000 in July, he will continue to have ESI deduction until August.
§ In the September payroll, the employee's ESI deduction will be zero (as he has crossed Rs. 10000/-)
§ The comparison of income is done with Full Income and the calculation of ESI is done on the actual payout (income).
What are the various ESI reports?#
§ ESI Monthly report - This report is generated monthly. This gives the total deductions/contribution (employee and employer) done for each employee for a month.
§ ESI Form 6 - This is a half yearly report.
§ ESI Form 7 - This is also a half yearly report.
See also:#
Learn more about ESI at the official website: Employee State Insurance Corporation (ESIC)
................................... End ..............................
I think it would be helpful to you.
All the best.
Regards,
Kalpana
Hyderabad
From India, Eluru
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1ESI (Employee State Insurance)
Table of Contents
§ Employee State Insurance (ESI) FAQs
§ What is ESI?
§ What are the rates for contribution (deduction) to ESI?
§ What is ESI Gross Salary?
§ What are the other rules governing ESI?
§ What are the various ESI reports?
§ See also:
Employee State Insurance (ESI) FAQs#
What is ESI?#
ESI refers to Employee State Insurance. This is an insurance scheme run by the government. In this scheme, an employee contributes part of his salary as an insurance premium. Along with the employee, the employer also contributes to the scheme. The government collects this money and operates ESI hospitals.
§ whenever an employee falls sick, he can go to these ESI hospitals and avail free treatment.
§ ESI contribution is mandatory for all employees who draw a gross of less than 10000/-
What are the rates for contribution (deduction) to ESI?#
§ For employees, ESI deduction rate is 1.75% of the ESI Gross salary.
§ For employer, ESI contribution is at the rate of 4.75% of the ESI gross salary.
What is ESI Gross Salary?#
Generally all the income components paid to an employee is considered for ESI Gross computation.
What are the other rules governing ESI?#
ESI contribution stops when the employee's gross income crosses Rs. 10000/-.
§
§ This stoppage of ESI cannot happen in any month. The changeover from ESI-deduction to no-ESI-deduction can happen only in 3rd (March) or 9th (September) month only. i.e. even if an employee's salary crosses, 10000 in July, he will continue to have ESI deduction until August.
§ In the September payroll, the employee's ESI deduction will be zero (as he has crossed Rs. 10000/-)
§ The comparison of income is done with Full Income and the calculation of ESI is done on the actual payout (income).
What are the various ESI reports?#
§ ESI Monthly report - This report is generated monthly. This gives the total deductions/contribution (employee and employer) done for each employee for a month.
§ ESI Form 6 - This is a half yearly report.
§ ESI Form 7 - This is also a half yearly report.
See also:#
Learn more about ESI at the official website: Employee State Insurance Corporation (ESIC)
................................... End ..............................
I think it would be helpful to you.
All the best.
Regards,
Kalpana
Hyderabad
From India, Eluru
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Hi Sinju Their salary is more than Rs. 10000/-, then should it be covered under ESIC Act 1948. NO
From India, Coimbatore
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From India, Coimbatore
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Dear All,
Suppose an organization employs 200 employees, and all their salaries are more than Rs. 10000, should it be covered under the ESIC Act 1948.
Kindly let me know your views.
Sinju George
If any employee gets Rs. 10001 per month, then they will be exempted from the ESI rule. However, if the washing allowance is included in their salary, then you have to pay the ESI contribution. For example, if the salary is Rs. 10500 and the washing allowance is Rs. 750, then you have to calculate the contribution on 10500 - 750 = 9750 and pay the ESI on 9750.
Feel free to revert.
Regards,
Ravi Kulkarni
HR Manager
From India, Mumbai
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Suppose an organization employs 200 employees, and all their salaries are more than Rs. 10000, should it be covered under the ESIC Act 1948.
Kindly let me know your views.
Sinju George
If any employee gets Rs. 10001 per month, then they will be exempted from the ESI rule. However, if the washing allowance is included in their salary, then you have to pay the ESI contribution. For example, if the salary is Rs. 10500 and the washing allowance is Rs. 750, then you have to calculate the contribution on 10500 - 750 = 9750 and pay the ESI on 9750.
Feel free to revert.
Regards,
Ravi Kulkarni
HR Manager
From India, Mumbai
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Dear friend,
When considering the coverage of an establishment under ESIC, 20 persons drawing less than 10,000 per month are to be included. This includes individuals in roles such as office boys, security personnel, sweepers, etc. Additionally, if the establishment employs contract workers, such as security guards or housekeepers, without a separate ESI code number, these employees should also be considered along with your regular employees.
Thank you.
From India, Madras
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When considering the coverage of an establishment under ESIC, 20 persons drawing less than 10,000 per month are to be included. This includes individuals in roles such as office boys, security personnel, sweepers, etc. Additionally, if the establishment employs contract workers, such as security guards or housekeepers, without a separate ESI code number, these employees should also be considered along with your regular employees.
Thank you.
From India, Madras
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Hi,
As you are employing more than 20 employees, as per statutory regulations, you should cover your establishment under the ESI Act. You can treat all the employees who are drawing more than Rs. 10,000 per month (excluding Overtime Wages) as exempted employees and should send periodic nil returns to the authorities.
Regards,
R G NAGENDRA
From India, Mumbai
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As you are employing more than 20 employees, as per statutory regulations, you should cover your establishment under the ESI Act. You can treat all the employees who are drawing more than Rs. 10,000 per month (excluding Overtime Wages) as exempted employees and should send periodic nil returns to the authorities.
Regards,
R G NAGENDRA
From India, Mumbai
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Applicability of ESIC Act if all employees' salary is more than Rs. 10,000.
If the salary is below Rs. 10,000, ESI is applicable. However, if the salary is Rs. 10,001, the ESI Act does not apply. In such cases, you must arrange other medical facilities for the employees. Simultaneously, you must apply the Maternity Benefit Act for female workers.
Thanks & Regards,
A. PALPANDIAN
Officer - Human Resource
From India, Bangalore
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If the salary is below Rs. 10,000, ESI is applicable. However, if the salary is Rs. 10,001, the ESI Act does not apply. In such cases, you must arrange other medical facilities for the employees. Simultaneously, you must apply the Maternity Benefit Act for female workers.
Thanks & Regards,
A. PALPANDIAN
Officer - Human Resource
From India, Bangalore
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Hi all,
I am new to HR and need your advice/help with the following questions. Under the ESIC act for a pharmaceutical company, are there any stipulations on the leave policy? Secondly, since it's a startup company, there is no implementation of any gratuity rules. Is this illegal as per the act? We have around 70-80 office-based and around 800-1000 sales/field staff. What are the other ESIC-related rules that would apply to a pharma company?
Please help!
From India, Bangalore
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I am new to HR and need your advice/help with the following questions. Under the ESIC act for a pharmaceutical company, are there any stipulations on the leave policy? Secondly, since it's a startup company, there is no implementation of any gratuity rules. Is this illegal as per the act? We have around 70-80 office-based and around 800-1000 sales/field staff. What are the other ESIC-related rules that would apply to a pharma company?
Please help!
From India, Bangalore
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Hello everybody,
Recently, on the 19th of February 2010, the Labour Ministry, in a meeting, decided to increase the wage ceiling for ESI coverage from Rs. 10,000/- to Rs. 15,000/-. The date of implementation is not yet decided or declared. This may take time due to procedural aspects of passing the notification, etc. When this is implemented, the exemption will be for incomes from Rs. 15,001/- and above. It is possible that the number of eligible employees in your company may increase to 10 (minimum required if using power) or 20 (minimum required if not using power), making you legally liable for coverage.
Therefore, please wait for a couple of months before committing to an alternate scheme, assuming you are not liable for ESI scheme coverage.
Regards
From India, Bangalore
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Recently, on the 19th of February 2010, the Labour Ministry, in a meeting, decided to increase the wage ceiling for ESI coverage from Rs. 10,000/- to Rs. 15,000/-. The date of implementation is not yet decided or declared. This may take time due to procedural aspects of passing the notification, etc. When this is implemented, the exemption will be for incomes from Rs. 15,001/- and above. It is possible that the number of eligible employees in your company may increase to 10 (minimum required if using power) or 20 (minimum required if not using power), making you legally liable for coverage.
Therefore, please wait for a couple of months before committing to an alternate scheme, assuming you are not liable for ESI scheme coverage.
Regards
From India, Bangalore
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