Dear Ms. Gayathri,
As per the ESI Act, 1948, The ESI contrbution is paid on all the allowances except travelling reimbursements and washing allowances. In reagrds to the ESI coverage, and annual payout will be exempted in case of Diwali Bonus, Attendance Bonus and LTA paid.
Exemption for ESIC in case if the salary drawn is above Rs.15001/-. In case if the employer also has the medical facilities offered are much better to that of the ESIC hospitals.
Employers can apply for exemption with respect to a class of employees getting similar or better benefits than the statutory P.F. Scheme under P. 27, the employer can seek exemption from P.F. Scheme for the entire establishment if the majority of the employees also consent for exemption, subject to certain conditions governing grant of exemption and certain formalities.
Only on the ground that the establishment is set up in SEZ ESI or EPF exemption can not be availed. Coverage of ESI is location wise and there are a lot of areas where ESI is not applicable. Therefore, all establishments set up in such areas which are not notified as ESI covered areas will be exempted from the operation of ESI.
Similarly, an establishment which is set up in ESI notified area and thus covered by ESI Act can take exemption from ESI Act provided the establishment is giving better benefits to its employees than what are being provided by ESIC. For getting exemption the company has to apply and establish that the benefits are better than what are envisaged under the ESI Act. In the similar way, if the benefits of provident fund and pension benefits provided by the establishment are better than what are provided by the Employees Provident Fund Organisation under the Employees Provident Fund and Miscellaneous Provisions Act, then the establishment shall obtain exemption from the coverage of EPF.
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