Dear Seniors,
As all of us are aware of the increase in the ESIC limit, the new ESIC limit is Rs 21,000/- effective from January 17, instead of Rs 15,000/-. Here, we can see a situation where some employers may not want to increase the employee CTC by paying the Employer contribution of ESIC and are adjusting with the existing CTC of the employee by decreasing their net pay (which most employees don't like). Therefore, the increase in the ESIC limit between Rs 15,000 to Rs 21,000 will not affect their costs.
Is this the right way to make contributions? Is it legally acceptable?
I have gone through the ESIC act and the Notification, where the ESIC act under the Contributions Clause no. 38 to 43 states that Employer contribution cannot be reduced from employees' wages.
I am looking for advice/views from industry seniors.
Warm Regards,
Praveen Devadiga
From India, Bangalore
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13As all of us are aware of the increase in the ESIC limit, the new ESIC limit is Rs 21,000/- effective from January 17, instead of Rs 15,000/-. Here, we can see a situation where some employers may not want to increase the employee CTC by paying the Employer contribution of ESIC and are adjusting with the existing CTC of the employee by decreasing their net pay (which most employees don't like). Therefore, the increase in the ESIC limit between Rs 15,000 to Rs 21,000 will not affect their costs.
Is this the right way to make contributions? Is it legally acceptable?
I have gone through the ESIC act and the Notification, where the ESIC act under the Contributions Clause no. 38 to 43 states that Employer contribution cannot be reduced from employees' wages.
I am looking for advice/views from industry seniors.
Warm Regards,
Praveen Devadiga
From India, Bangalore
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Dear member, the concept of CTC is not recognized or defined in the ESI Act, 1948, and the rules/regulations framed thereunder. You must understand the definition of the term "wages" as defined under section 2(22) of the said Act.
The employer cannot deduct the contribution of the employers' share from the wages of the employees, and it is an offense punishable under section 85(b) of the said Act. Please also see section 40(3) of the said Act.
From India, Noida
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The employer cannot deduct the contribution of the employers' share from the wages of the employees, and it is an offense punishable under section 85(b) of the said Act. Please also see section 40(3) of the said Act.
From India, Noida
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