We are the manufacturing sector of making bakery items, recently management hiked salaries of employees due to which many of them were out of ESIC scheme (salary more than Rs.21K) and the same month challan was generated and payment was made. Now some of the employees requesting management that their require ESIC coverage compulsory for their families for getting better treatment. Is there any provision of reducing their salary to Rs.20,000 to re-enroll them in ESIC and balance amount can be given by way of cash and will it effects their esic benefits if registered again.
Please suggest sir, is there any option as per the act in re-registration of employee in esic by reducing his salary
From India, Hyderabad
Please suggest sir, is there any option as per the act in re-registration of employee in esic by reducing his salary
From India, Hyderabad
Hi,
The ESI contribution period is as below
1st April to 30th September
1st October to 31st March of the next year.
After the commencement of a contribution period, even if the gross salary of an employee exceeds Rs. 21,000 monthly, the employee continues to be covered under ESI scheme till the end of that contribution period and the contribution is deducted on the new salary even if it is above Rs.21,000/-. So for information you need to deduct ESI till the end of contribution period irrespective of hike.
For argument sake let's assume that you will manage the hike by paying some money as cash. But how long you will follow this process as the salary of the employees will get revised on yearly basis. So alternatively if you are providing free Mediclaim Policy for employee and family you can project the same as an substitue for ESI.
From India, Madras
947The ESI contribution period is as below
1st April to 30th September
1st October to 31st March of the next year.
After the commencement of a contribution period, even if the gross salary of an employee exceeds Rs. 21,000 monthly, the employee continues to be covered under ESI scheme till the end of that contribution period and the contribution is deducted on the new salary even if it is above Rs.21,000/-. So for information you need to deduct ESI till the end of contribution period irrespective of hike.
For argument sake let's assume that you will manage the hike by paying some money as cash. But how long you will follow this process as the salary of the employees will get revised on yearly basis. So alternatively if you are providing free Mediclaim Policy for employee and family you can project the same as an substitue for ESI.
From India, Madras
Re registration is possible but under what conditions you are going to reduce the wages to your employees? Instead of 20,000 you still can consider even 20500 also.
paying different of wages by cash is not advisable, rather you find out the alternate mechanism to compensate the difference of wages
From India, Bangalore
paying different of wages by cash is not advisable, rather you find out the alternate mechanism to compensate the difference of wages
From India, Bangalore
ESI and EPF are statutory schemes of social protection to certain class of employees based on the quantum of monthly salaries. Periodical hike in salaries is to protect the real income from employment so as to enable the employees to keep up their efficiency and standard of living. If the employees
face the risk of losing such statutory protection just because of the hike in salary, it is the duty of the employer to find out certain suitable alternatives rather than resorting to reduction in salaries. Besides, it is also unethical and unlawful to reduce the existing salary even with the consent of the employees.
From India, Salem
face the risk of losing such statutory protection just because of the hike in salary, it is the duty of the employer to find out certain suitable alternatives rather than resorting to reduction in salaries. Besides, it is also unethical and unlawful to reduce the existing salary even with the consent of the employees.
From India, Salem
Sir in continuation to my earlier message, one of the staff who is out of esi coverage who requested management to
compulsory give esi, but the main problem here is difference in basic salary, earlier his basic was Rs.10,500 & after hike
basic salary increased to Rs.11,500, if we are re-enrolling him in esi by reducing his gross salary, it effects basic also which we cant reduce as it is linked with EPFO
Respected Seniors please guide how to solve this matter
From India, Hyderabad
compulsory give esi, but the main problem here is difference in basic salary, earlier his basic was Rs.10,500 & after hike
basic salary increased to Rs.11,500, if we are re-enrolling him in esi by reducing his gross salary, it effects basic also which we cant reduce as it is linked with EPFO
Respected Seniors please guide how to solve this matter
From India, Hyderabad
Hi In that case reduce Rs.1000/- in Other Allowance component so that Basic can remain same.
From India, Madras
From India, Madras
Thank you sir for the suggestion, but in this case its not possible as his gross salary is Rs.23,000 and almost Rs.3000 need to be reduced from his salary to again re-enroll in esi, but by doing this basic salary is also getting reduced which compulsory effects PF contribution
From India, Hyderabad
From India, Hyderabad
Hi
You cannot reduce basic once contribution is made on revised Basic. So reducing Basic salary option is ruled out. So just alter other allowance alone. The best option is to turn down the request of the employee and inform that salary structure cannot be restructured. By encouraging such requests you are setting a wrong predecent to other employees and also getting entangled into statutory issues.
From India, Madras
You cannot reduce basic once contribution is made on revised Basic. So reducing Basic salary option is ruled out. So just alter other allowance alone. The best option is to turn down the request of the employee and inform that salary structure cannot be restructured. By encouraging such requests you are setting a wrong predecent to other employees and also getting entangled into statutory issues.
From India, Madras
Thank you very much sir for your valuable guidance, will discuss accordingly with our management
From India, Hyderabad
From India, Hyderabad
Dear OP,
We had faced a similar problem last year and the employee concerned requested us to get him back into ESI after his Benefit Period had expired (his wife was going through a complicated pregnancy). He even agreed to give a formal request to reduce his salary so that he could get back into ESI.
Though we knew this would be inappropriate, we nevertheless checked with Regional Office; and they advised us "DON'T DO".
So we didn't. Instead we provided him with a medical Policy.
Regards
From India, Kochi
We had faced a similar problem last year and the employee concerned requested us to get him back into ESI after his Benefit Period had expired (his wife was going through a complicated pregnancy). He even agreed to give a formal request to reduce his salary so that he could get back into ESI.
Though we knew this would be inappropriate, we nevertheless checked with Regional Office; and they advised us "DON'T DO".
So we didn't. Instead we provided him with a medical Policy.
Regards
From India, Kochi
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Employee Salary file - India 2016 AB.xls
Employee Appraisal Form new.doc