Madhu.T.K
Industrial Relations And Labour Laws
BALAJI R
Service - Private

Dear Sir, Thank for giving your opinion. If an employee has remuneration more then 10,000/- but get wages less than 10,000/- due to absence for few days in any particular month, then it does not attract deduction of ESI. I am aware of this and agree the same. I learnt that one of the ESI Inspector in Tamilnadu during his Inspection is interpreting that, if an employee whose wages is Rs.10500/- because of Loss of Earnings if his Gross Earnings comes down by Rs.600/- viz.Rs.9.900/- he is insisting that he has to be deducted ESI contribution. To dispute his claim, i need any case laws/judgements in support of our stand. Thanks and Regards, BALAJI
From India, Madras
Wages for the purpose of coverage under any Act, whether ESI or EPF, means gross wages and not the net take home wages. Only thing to be noted is that while determining the gross wages, you should take only such amounts as permitted under different Acts. As such, under ESI Act, you can take Basic wages, Dearness Allowance, House Rent Allowance, shift allowance etc and the total for the month should exceed Rs 10000 to be out of coverage. An uncovered employee will not be covered just by virtue of him receiving lesser amount on a particular month due to his absence/ leave without pay. It is not practically possible to cover an employee just for a month. Certainly a covered employee will continue to be covered for the entire contribution period. Regards, Madhu.T.K
From India, Kannur
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