Dear All,
As per my knowledge, if any establishment is employing 20 or more employees, the establishment has to be covered under the ESI Act. However, if all the employees are receiving a salary of more than 10,000/-, then the ESI Act will not be applicable, as I believe.
In the above case, the total number of employees is 140, but the number of coverable employees is only 16 as they are earning a salary less than 10,000/-. Therefore, only these employees are covered under the ESI Act.
Ravi Gupta
From India, New Delhi
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1As per my knowledge, if any establishment is employing 20 or more employees, the establishment has to be covered under the ESI Act. However, if all the employees are receiving a salary of more than 10,000/-, then the ESI Act will not be applicable, as I believe.
In the above case, the total number of employees is 140, but the number of coverable employees is only 16 as they are earning a salary less than 10,000/-. Therefore, only these employees are covered under the ESI Act.
Ravi Gupta
From India, New Delhi
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Hi Everybody, Kindly tell me the applicability of ESI act in case of trainees in a manufacturing company. Jyoti
From India, Delhi
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From India, Delhi
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Applicability of ESIC is not only concerned with the number of employees but also the type of industries. For establishments covered under the Shops & Establishments Act, the employee strength should be 20 or more. For establishments covered under the Factories Act, the employee strength should be 10 or more. Industries such as hotels, restaurants, cinema theaters, transport and logistics companies require a minimum of 10 employees for ESIC coverage. However, the scheme does not extend to hospitals, nursing homes, educational institutions, and construction companies.
Thanks and regards,
Sumit Kumar Saxena
From India, Ghaziabad
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Thanks and regards,
Sumit Kumar Saxena
From India, Ghaziabad
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Hi guys,
Just wondering why there is so much confusion. Please find below my comments:
1. A company is covered under ESI if the number of employees who receive an equivalent or less than Rs.10,000 is 20 or more.
2. Once you reach the limit of 20 employees who receive an equivalent or less than Rs.10,000, you have to register with ESI.
3. Once you register, you have to pay ESI contributions for employees who have been receiving an equivalent or less than Rs.10,000 in the past as arrears. In fact, interest/fine is also calculated and levied. The catch is that corporates do not get tax exemption for the interest/fine paid; it must be shown as an expenditure in the balance sheet.
4. You must continue to pay the ESI contributions even if an employee receives a raise and crosses the Rs.10,000 limit until the half-yearly returns (two half-yearly).
I hope the above points are clear. However, the ACT itself is quite confusing, and there are numerous practical difficulties in implementation.
Particularly in IT companies, very few employees claim anything from ESI, as the percentage of usage and claims is minimal. This is largely due to the fact that IT companies typically opt for comprehensive medical insurance coverage, allowing employees to access medical assistance from top-tier hospitals with high-quality services.
Regards,
Sohail
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Just wondering why there is so much confusion. Please find below my comments:
1. A company is covered under ESI if the number of employees who receive an equivalent or less than Rs.10,000 is 20 or more.
2. Once you reach the limit of 20 employees who receive an equivalent or less than Rs.10,000, you have to register with ESI.
3. Once you register, you have to pay ESI contributions for employees who have been receiving an equivalent or less than Rs.10,000 in the past as arrears. In fact, interest/fine is also calculated and levied. The catch is that corporates do not get tax exemption for the interest/fine paid; it must be shown as an expenditure in the balance sheet.
4. You must continue to pay the ESI contributions even if an employee receives a raise and crosses the Rs.10,000 limit until the half-yearly returns (two half-yearly).
I hope the above points are clear. However, the ACT itself is quite confusing, and there are numerous practical difficulties in implementation.
Particularly in IT companies, very few employees claim anything from ESI, as the percentage of usage and claims is minimal. This is largely due to the fact that IT companies typically opt for comprehensive medical insurance coverage, allowing employees to access medical assistance from top-tier hospitals with high-quality services.
Regards,
Sohail
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Dear Friends, News for today: ESIC band has increased from 10,000 to 15,000 w.e.f. 1st April, 2010. It means employees drawing a gross salary below 15,001/- will be eligible for ESI.
From India, Pune
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From India, Pune
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Kindly provide notification for the date of applicability that limit stand increased from 1. april 2010. Regards Amit
From India, Delhi
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From India, Delhi
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Changes in the Applicability and Coverage of ESI Scheme under the Code on Social Security.doc
Applicability of ESI Act.pdf