mahendrafuria Started The Discussion:
Dear All

As we all are aware that new ESIC limit is changed from 10000 to 15000 effective 01/05/2010.

My question here is
Employee's Gross was Rs. 12500 so he was not covered in ESIC before 01/05/2010.
Now since ESIC limit has increased he is covered in ESIC.
He receives salary increment in the month of May effective April 2010. so the arrears for the month of April will be along with May month's salary.
Will ESIC be deducted on Arrears of April month's salary? as he was not covered at that time.

Please reply ASAP.

Mahendra Furia
28th May 2010 From India, Mumbai

Dear Mahendra, ESIC contribution will not be deducted for the Apr10 months arrears payments. Bhupesh
28th May 2010 From India, Mumbai
In April, the ceiling limit was only 10,000/- and the employee was drawing above this limit in April, which was the beginning of the contribution period. The revision in wage ceiling has come in to effect only from 1st May. Hence he is re-coverable only from May on wards. No need to pay any contribution for April.
The General Rule is for any increase in Dearness allowance or increment from a retrospective date, the ESI Contribution is to be paid only from the month in which such increase is announced.This is applicable for coverage of an employee also. In case of revision of wages from a retrospective date as a result of agreement with the employees' organisation or otherwise, contribution is due only from the month in which such agreement is reached or the wage revision is announced as the case may be. No need to pay any contribution on the past arrears. Similarly, the employee cannot be exempted from ESI from a retrospective date due to crossing the wage ceiling, but continue to be covered till the end of the contribution period in which such revision is announced. If wages are increased from Jan'10, and announced in May, 10, contribution is to be paid on enhanced wages from May,10. If the employee cross the ceiling limit as a result of the revision, contribution is to be paid till the end of Sept.'10.
29th May 2010 From India, Hyderabad
Dear This new limit has been applicable by 1st of May, 2010. That’s why it has no relation with previous Salary of concerned employee.
29th May 2010 From India, New Delhi
Thank u sir, all our members from cite hr will get boon in their knowledge due to ur active participation.....hope u will continue the same....
29th May 2010 From India, Hyderabad
Thank u for being the member of this cite. Hope due to ur active participation all the members will get boon in their knowledge...keep on post.......
29th May 2010 From India, Hyderabad
his arrers will not be deducted till wil b applicable from 1st may. thanks Roy Head HR-East India SMC Group.
29th May 2010 From India, Delhi
What it mean, no need of ESI contn. on arrears amount....From May onwards ESI is to be deducted on the raised salary.....
30th May 2010 From India, Hyderabad
No change in the % of ESI deduction, i.e. Employees share is @ 1.75%(rounded up to the next higher rupee) & Employer's share is @ 4.75% totally be deposited on or before 21st of the following month........... in case of any querry don't hesitate to call me @ 09443434313 or .......
30th May 2010 From India, Hyderabad
Hi Mahendra,

Even if the salary is hiked, immediately you cannot stop the ESI contribution for them. You have to finish their cycle of contribution period corresponding to the next benefit period. Abruptly you canot stop the contribution from the date of the new revision.

1st Cont period: April - Sep, 1st Benefit period:July - Dec
2nd Cont period: Oct - March, 2nd Benefit period:Jan - June

Your staff continues to be a member till the end of that contribution period and corresponding Benefit period is covered. For the remaining months of contribution period, he has to pay ESI on the new wages and stop from next cycle. So accordingly you plan the salary revision time.

30th May 2010 From India, Madras


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