Hr Professional
Ajay Shukla
+1 Other

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Respected all,
I want your suggestion about the below mentioned description:--
I have a contract of outsourcing with 2 clients, initially the employees came to our roll with the gross salary, which is not comes under the ESIC wage limit. Now, ESIC has increased the limit i. e 15000gross w. e. f May2010.

Keeping in view the above you are further requested to guide me that if employees are getting Medical Reimbursement then there is ESIC's liability for company or they are exempted form ESIC applicability.

I will be very grateful to you.

with Regards
Vikas Kumar

From India, New Delhi
Dear Vikas,
The ESI can be exempted only when there is better or equal scheme in the company, whcih is not possible practicly.
So, it can never be avoided whether company is paying medical or any re-imbursement, allowances to their employees.
Therefore, ESI would be applicable on those employees who are getting the gross salary/wages upto 15000/- permonth w.e.f 01.05.2010.
Ajay Shukla
Consultant Labour Laws, Kanpur

From India, Calcutta
dear friends, ESI limit increased from 10000 to 15000 w.e.f 1/5/10
From India, Hyderabad

Attached Files
File Type: doc ESIC approves enhancement of wage ceiling from 10.doc (20.5 KB, 821 views)

Sorry mathangi, i wrongly typed earlier, I agreed with mr. Ajay Shukla, since in ESI Act, there are certain provisions for exemption from ESI Act in the following cases:

i) Exemption for certain class of factories/esttt., ii) Exemption for certain class of employees & iii) Exemption for certain provisions fo the ESI.....

The first point that ESI Exemption committee will see at is : Whether the Employer is providing at par or superior benefits than ESI....but no company will give equal or more benefit than ESI, only for regular employees that too public sector only provides the benefits at par or superior benefits to ESI..... Since some of the main benefits given by the ESI are:

i) Sickness Benefit...Insured person is entitled for 91 days leave in one year with approximately 60% of his wages, besides the medical/hospital benefit;

ii) Enhanced Sickness Benefit:... Incase of Family planning, i.e. Tubectomy/vasectomy the concerned insured person/women are entitled for cash benefit more than or equal to their wages besides medical/hosptal facility;

iii) Extended Sickness Benefit:.. in case of certain long diseases like TB/Heart diseases...etc... even the medical benefit will be extended to 3 years irrespective of his employment position ...& cash benefit will be extended upto 2 years, in case if he is having 2 years of insurable employement..

iv) Disablement Benefit: If a person met with an injury/accident at work place or on the way to work place or return from workplace to home, he is entitled for Temporary disablement benefit, which nearly 80% of his wages, for which there is no limit, i.e. the leave may be extended beyond 91 days... If it results in loss his earling capacity due to loss of early part of body,ex. a part of finger, or a fracture to leg, etc..... he will be paid life long pension on the basis of the recommendations of the Medical Board, irrespective of the fact that whether he continues that employment or not; In case if dies due to that employment injury the pension will be paid to the dependants...ie. wife till life time or remarriage, children upto 21 years, widowed mother....

v) Maternity Benefit: If an I.W. completed 9 months service under ESI coverage and works for wages for 70 days in the concered contribution period she will be paid 84 days maternity benefit @ rate of more than her wages, besides medical/hospital facility;

Besides all these things Insured Persons/women are entitled for funeral expenses, superspeciality treatment, In cases of loss of job due to retrenchment he will be paid Unemployment allowances with certain terms and conditions...etc., What more........

Since ESI is providing handful of benefits......No company afford these things... Hence getting exemption is said to be highly difficult.......

I hope i clarified all the doubts among our HR friends about ESI....

In case of any query/doubt don't hesitate to call me @ 09443434313 or write to

From India, Hyderabad
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