Greetings Team,
I am working in FMCG industry Dairy organisation as HR associate. I have come across an issue related ESIC and medical allowances deduction in salary.
I would like to address a concern regarding Employee A’s salary and ESIC deductions.
Employee A has been with us for 2 years and was covered under ESIC before his recent salary increment.
His total salary now exceeds the ESIC slab of ₹21,000, making him ineligible for ESIC benefits moving forward.
He received his increment letter in August, and his new salary includes medical allowances.
Current situation-
As per ESIC rules, deductions must continue until the end of the contribution period, i.e., September.
Our company policy states that if ESIC is being deducted, medical allowances should not be deducted.
Due to this, Employee A received a lower in-hand salary (₹18,622) instead of the expected ₹19,000.
How can I solve this problem ? How can I explain to the management to change the rule or employee to understand that this practice has been followed since 15 years.
Can anyone please guide me on this.
From India, Mumbai
2I am working in FMCG industry Dairy organisation as HR associate. I have come across an issue related ESIC and medical allowances deduction in salary.
I would like to address a concern regarding Employee A’s salary and ESIC deductions.
Employee A has been with us for 2 years and was covered under ESIC before his recent salary increment.
His total salary now exceeds the ESIC slab of ₹21,000, making him ineligible for ESIC benefits moving forward.
He received his increment letter in August, and his new salary includes medical allowances.
Current situation-
As per ESIC rules, deductions must continue until the end of the contribution period, i.e., September.
Our company policy states that if ESIC is being deducted, medical allowances should not be deducted.
Due to this, Employee A received a lower in-hand salary (₹18,622) instead of the expected ₹19,000.
How can I solve this problem ? How can I explain to the management to change the rule or employee to understand that this practice has been followed since 15 years.
Can anyone please guide me on this.
From India, Mumbai
Hi,
Deduction of ESI contribution till Sep,24 ( irrespective of hike) is mandatory and you can't change it.
It is not very clear how you are correlating ESI deduction with medical allowance.
In whatsoever case you need to explain the statutory requirement to the Management and also to the Employee.
From India, Madras
Deduction of ESI contribution till Sep,24 ( irrespective of hike) is mandatory and you can't change it.
It is not very clear how you are correlating ESI deduction with medical allowance.
In whatsoever case you need to explain the statutory requirement to the Management and also to the Employee.
From India, Madras
Seems to me that is an oversight of the HR team. His increment in August pushed his basic above 21,000 making him ineligible for ESIC, but as per ESIC rules, it has to be deposited till September. For the month of September, I assume you have deducted both ESIC and medical coverage, which is a mistake to be corrected.
There is no need for the management to change the rule (people covered under ESIC are not needed to be covered under medical insurance). Perhaps you could add the additional medical allowance that was subtracted from his September salary to the next month's salary, explaining the mistake to the employee. Better checks to be implemented so that the Payroll representative does not miss these things.
From India, Bengaluru
There is no need for the management to change the rule (people covered under ESIC are not needed to be covered under medical insurance). Perhaps you could add the additional medical allowance that was subtracted from his September salary to the next month's salary, explaining the mistake to the employee. Better checks to be implemented so that the Payroll representative does not miss these things.
From India, Bengaluru
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