Suresh Ramalingam
Legal, Hr & Compliance
Gm (hr)
Professional Consultant
Hr, Ir & Compliance
Sr.executive Hr
+4 Others

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Dear Sir/Mam, I represent an 18 year old embedded company located in Bangalore with more or less 80 employees Head count. we have private insurance for all employees but not ESI. Our organization have 21 employees under 10,000 CTC per month, which includes: Technicians, Office Assistants, Front office, Trainees, Apperntice employees. I have some doubt on ESI & hope you will help me in solving them..
1. Is ESI a mandatory for employees in an organization.
2. Trainees or apprentice eligible for ESI.
3. Any other alternative in place of ESI, as other corporate private Insurance.
4. What are the repercussions, if rules not followed with ESI act in the organization.
Looking forward to hear from you.

From India, Bangalore
Dear friend,
Employee under ESI Act - ‘Employee’ means any person employed for wages in or in connection with work of a factory or establishment to which the ESI Act applies. Earlier employees drawing wages upto Rs. 6,500 per month were covered under the ESI Act scheme. [Section 2(9)]. However, w.e.f 1st April 2004, this wage ceiling has been increased to Rs. 7,500 per month again wage ceiling has been increased to Rs.10,000/- (now / at present).
Employees include * persons employed through contractor * Apprentices other than those covered under ‘Apprentices Act’ * Persons employed in administration office, department or branch for purchase or sale of products. * Casual workers engaged in work incidental to or connected with work of factory or establishment * Employees working at head office when factory is located at different place * Canteen staff, watch and ward staff are employees * Staff in hospital attached to factory are employees. - - Members of Indian Naval, Military or Air Forces are excluded.
Following are not Employees - * Persons drawing wages over Rs. 7,500 per month * member of Army, Navy or Air Force. * Partners of firm are not employees even if they are drawing wages - RD, ESIC v. Ramanuja Match Industry AIR 1985 SC 278 = 1985(1) SCC 218 = 1998(6) SCALE 38 * Persons employed in Government establishments. * construction workers engaged in raising additional building subsequent to initial set up of factory.
so, blow Rs.10,000/- those who are getting, Casual, Contract employees all are eligible for ESI Payment even though company has their own private policies.

If more than Rs.10,000/- they will not comes under ESI, but they will eligible for workmen compensation act.

hope u get the idea


From India, Kochi
Hi Jagadish,
Trainees are out of ESI as they are not employees of the organization and the compensation paid to them is referred as Stipend and not termed as Salary.
There is a Provision in ESI Act when the employer provides a better insurance Scheme than ESI , the organization is exempted from the same

From India
Be clearly understood only Trainees under the Apprentices Act, 1961 are excluded and not the Trainees under the Company's scheme or certified standing orders of the company even if they are being paid stipend.
ak malhotra
Sr General Manager

From India, Guwahati
trainees apppointed through apprentice act are only exempted under ESI otherwise not.
there is no alternate of ESI ,you may have good insurance scheme but ESI act will be applicable to you.
as madurima mentioned no where it is mentioned in the act that if u have better scheme u can be exempted from provisions of this act.
j s malik

From India, Delhi

Only the health care industry, private medical etc or the industry who are having their own medical facility like (TATA, Birla etc) & simultaneously they are offering other benefits like mediclaim. GPA etc whose service is no doubt better than the service providing by the ESI. Only the employees of such kind of establishment would be exempted from the ESI. But before that prior intimation should be given to the ESIC when the employer going to expel the service of ESI.


From India, Bhubaneswar
Hi All, Other than Apprentices (Enrolled in Apprenticeship Board) everyone is covered under ESI.
From India, Mumbai
Is this applicable to software firms too? We are providing health insurance for all our staff.
From India, Kochi
if a person came to the premises to do some work and give a bill for labour charges and we have pay him Rs. 600/day. IS ESI deducted ? as some people calculating and connecting with this to exemption rate of 15000/- ( as per Rs. 600/day his monthly income is Rs/ 18000/pm) hence he is exempted from esi.
Experts please clarify the doubt.

From India, Gurgaon
Dear All,
I am having doubt on ESIC, as per my knowledge accept Apprentices training all the trainee should come under ESIC but when we are getting trainee from College for Industrial trainee who supposed to get 2000 per month, they are eligible for ESIC or PF if yes then, what is meaning of Minimum Wages

From India
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