mahendrafuria Started The Discussion:
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.
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.
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