Hi,
One of our employees had a monthly gross salary of Rs 30,000/- and therefore was not eligible for PF enrollment (as salary above Rs 15,000) and not eligible for ESI enrollment (as salary above Rs 21,000). However, the employee leaves the company in just 5 days. Now, my queries are:
i) Since he has to be paid for 5 days and his salary amounts to Rs 5,000, does PF & ESI enrollment become mandatory for him as he is paid only Rs 5,000?
ii) Also, is Professional Tax to be paid for him or not? If he had continued for the full month, then definitely Professional Tax deduction would have been mandatory. However, since he has to be paid only Rs 5,000 and in our state, Professional Tax deduction is not required if the salary is below Rs 10,000.
Thank you.
From India, Nagar
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One of our employees had a monthly gross salary of Rs 30,000/- and therefore was not eligible for PF enrollment (as salary above Rs 15,000) and not eligible for ESI enrollment (as salary above Rs 21,000). However, the employee leaves the company in just 5 days. Now, my queries are:
i) Since he has to be paid for 5 days and his salary amounts to Rs 5,000, does PF & ESI enrollment become mandatory for him as he is paid only Rs 5,000?
ii) Also, is Professional Tax to be paid for him or not? If he had continued for the full month, then definitely Professional Tax deduction would have been mandatory. However, since he has to be paid only Rs 5,000 and in our state, Professional Tax deduction is not required if the salary is below Rs 10,000.
Thank you.
From India, Nagar
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PF and ESI are payable on notional wages. Since it is above Rs 15,000/21,000, you need not pay PF or ESI.
Profession Tax is payable on earned income. The relevant Act (it is a state Act and will vary from state to state) will provide the limit over which the tax becomes payable. Similarly, there will be a provision that in order to be taxable, one should have spent at least two months in the half year in the place coming under the jurisdiction of the local administration. Please check that and decide whether to pay it or not. Under Kerala rules, there is a minimum amount of revenue, i.e., Rs 12,000 per half-year below which the income is not subjected to the levy of profession tax. Similarly, one should have worked for at least 2 months.
From India, Kannur
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4481Profession Tax is payable on earned income. The relevant Act (it is a state Act and will vary from state to state) will provide the limit over which the tax becomes payable. Similarly, there will be a provision that in order to be taxable, one should have spent at least two months in the half year in the place coming under the jurisdiction of the local administration. Please check that and decide whether to pay it or not. Under Kerala rules, there is a minimum amount of revenue, i.e., Rs 12,000 per half-year below which the income is not subjected to the levy of profession tax. Similarly, one should have worked for at least 2 months.
From India, Kannur
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Dear ANONYMOUS,
If any employee is covered for PF and ESIC, then his/her salary must be deducted for PF & ESIC even if you are paying him 1 day's salary.
In your case, if he is covered under PF, then deduct 12% of the basic component of his 5-day salary. If he is covered under ESIC, then deduct 0.75% of his gross salary as PF & ESIC deductions.
Regards
From India, Mumbai
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If any employee is covered for PF and ESIC, then his/her salary must be deducted for PF & ESIC even if you are paying him 1 day's salary.
In your case, if he is covered under PF, then deduct 12% of the basic component of his 5-day salary. If he is covered under ESIC, then deduct 0.75% of his gross salary as PF & ESIC deductions.
Regards
From India, Mumbai
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Let me confirm that an employee becomes covered under ESI or PF only if his notional salary is below Rs 21,000 or Rs 15,000, as the case may be. Registration should have been made on the day of his joining itself. If you have agreed to pay Rs 30,000, you should not have registered him under ESI or PF. Now, instead of 5 days, suppose he had worked for 11 days. Is it possible for you to register him under ESI? No.
In short period engagement, the notional wages, the salary that would have been paid had the employee worked for 30 days should be taken as salary. Please find a circular from ESIC in this regard. A similar circular is also there on EPF as well. However, I don't have it at my fingertips right now.
From India, Kannur
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In short period engagement, the notional wages, the salary that would have been paid had the employee worked for 30 days should be taken as salary. Please find a circular from ESIC in this regard. A similar circular is also there on EPF as well. However, I don't have it at my fingertips right now.
From India, Kannur
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Hi Madhu Sir,
I need your expert advice on an ESI query. We have outsourced manpower for HK/Pantry boys. Recently, one of the Pantry boy's fathers met with an accident. When he went to ESI, he discovered that his father's name was not added to the ESI records.
According to the contractor, they have repeatedly asked all HK/Pantry boys to provide family details like Aadhar to enroll their family members, but they have not provided them. The contractor lacks any proof that they have requested HK/Pantry persons to provide these details.
As per my understanding, this is a compliance issue that needs to be addressed by the contractor. However, the contractor claims that the HK persons did not share their family details, resulting in their families not being added to the ESI records.
Please provide your valuable suggestions on what actions to take and what the relevant acts state.
From India, Delhi
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I need your expert advice on an ESI query. We have outsourced manpower for HK/Pantry boys. Recently, one of the Pantry boy's fathers met with an accident. When he went to ESI, he discovered that his father's name was not added to the ESI records.
According to the contractor, they have repeatedly asked all HK/Pantry boys to provide family details like Aadhar to enroll their family members, but they have not provided them. The contractor lacks any proof that they have requested HK/Pantry persons to provide these details.
As per my understanding, this is a compliance issue that needs to be addressed by the contractor. However, the contractor claims that the HK persons did not share their family details, resulting in their families not being added to the ESI records.
Please provide your valuable suggestions on what actions to take and what the relevant acts state.
From India, Delhi
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Failure to add the family members' details is negligence but is not a compliance issue. The contractor should have collected the information in Form 1 instead of collecting the details orally. In the absence of the family members' details in Form 1, it can be construed that the employee has no family (spouse and children), and neither his father nor mother are dependent on him. It is also possible that their monthly income exceeds Rs 9000.
Everyone knows that everything is online now. However, that does not mean that the old forms and formats should be scrapped. Most HR personnel do not collect Form 1 when an employee joins but register the employee by entering only the mandatory details in the employee registration field available in the online portal. If you had given Form 1, he would have filled in the names and other details of his father and mother, and you could have registered them as well. If he has not furnished the details of his father and mother, it could be assumed that he does not have a father or mother, or none is dependent on him.
Adding the dependents retroactively is not possible. At least for future treatments, it could be useful. Therefore, you may register them now.
From India, Kannur
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Everyone knows that everything is online now. However, that does not mean that the old forms and formats should be scrapped. Most HR personnel do not collect Form 1 when an employee joins but register the employee by entering only the mandatory details in the employee registration field available in the online portal. If you had given Form 1, he would have filled in the names and other details of his father and mother, and you could have registered them as well. If he has not furnished the details of his father and mother, it could be assumed that he does not have a father or mother, or none is dependent on him.
Adding the dependents retroactively is not possible. At least for future treatments, it could be useful. Therefore, you may register them now.
From India, Kannur
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