Questions On ESIC & Employer Bond - CiteHR
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Dear All,

I am working in an I.T. company in Ahmedabad. Until now we had only professional tax deduction in our salary but from this month (july salary which was paid in august) there is a huge deduction in our salary.

My CTC is 8000 Rs/mo. Am I eligible for ESIC ? I have heard ESIC is not applicable if Gross salary is more than 6500 Rs.

If ESIC is applicable for me than I am only entitled to pay 1.75% but my employer has deducted 520 Rs. they say employee have to pay 4.75% as well. What can be done if they are not paying their part ?

We have opposed against this & have asked to remove ESIC but they are saying that our company is now registered as pvt. ltd. so esic is mandatory but even our ESIC forms are not submitted yet and salary is deducted for last month they are asking us to submit ESIC form now. Even, I am declining to fill up the form but our HR is saying that it is mandatory.

Following this I informed our HR & Manager that if they will not give me the said salary (8000 Rs. / Month) then I am not going to do this job but our HR told me that I have to continue for 1.5 years or I have to pay them 40,000 Rs.

I just joined this company 1 month ago. I have not signed on any bond / legal or stamp papers with them but what happened with me is when HR gave me the appointment letter she asked me to sign on their copy & in company polices it is written that page.

It is written something like..

for first three months an employee is on training & probation period.

If any employee leaves the company before 1.5 years then he has to pay 40000 to company as training amount.

I feel I have been cheated because when our HR gave me appointment letter e gave me a copy & asked me to sign on their copy. She told me that this is general company policies. So, I had signed on it, it was just on a simple paper, company letter pad.

I told our HR that I have not signed any bond so you can not do anything, in court this paper has no value & also company has not provided me any training I am working on live projects from very first day. I told her that to prove that company has spent on my training you have to give me training in real & during training period I have not to do any productive work but she told me that rules are different for IT companies. "You are working under sir's guidance (team leader's guidance) so that is one kind of training.

Finally, she told me that we will not increase your salary you can leave if you want but first you have to pay us 40,000 or bare legal problems.

So, what can be done in this case I do not want to continue in this company if they don't offer the said amount. They also do not give any paid leave during probation period. So, my Gross salary becomes very less after all tax, esic, leaves etc. deduction it becomes are 6000 & I can not afford to go there for this salary.... I am working as a software engineer.

One thing I can do is:

go to company & not do any work so they can terminate me ?

2. not to go to office regularly... like I go for 2 days & then 3 days in a week I don't go to job ! so legally they can not prove that I have broken the bond or let's say their employment terms !

In no way it is written in company policy that if employer terminate the employee then employee has to pay 40,000 (NOTHING SIMILAR TO THIS IS WRITTEN)

one more thing is written in offer letter / company Terms :

that.. if any employee remains absent for continuous 7 days without prior notification then their employment gets canceled.

here are answers by our HR to the questions we (employee) had submitted her regarding ESIC... Enojy it....!


Why you (Company) have deducted 4.75% when it should be deducted

from the company?

• Because it is part of your CTC i.e. Gross salary..

• Please make it optional to go for ESIC.., If not then you (Company)

should pay 4.75%

• There is no option available for that…

• If PF will be deducted then the same analogy will apply? i.e. 24% from

our salary?

• It will be part of your CTC so same analogy will apply but there is

different formula and provisions for PF..

• If it is the things then increase our salary..

• It can be increased on the time it cannot be increased without any

proper procedure or channel..

• Does an Employee need to afford whole 6.5 %...??? I have found on

some blogs & forums that 4.75 are to be paid by Company.

• Only if it is not the part of CTC but it is so it will be deducted,.. and

company as well not getting any benefit from it..

• We had a meeting about all this stuff in this month only then why ESIC

deduction from last month’s pay?

• Because company has been registered in the month of JULY..

• How come we have been charged when we have not even registered?

• Even company is in the registration process still we need to deduct..

• Why we are not informed about this deduction in advance? & we are

informed now after deduction?

• There was the seminar conducted to give you information

• For trainees.. 3 months we are told to get stipend. And this reduction is

on salary.. so on what basis this reduction is done for trainees??

Difference Between Apprentice and trainee

1. Trainee employee is actual employee and hired by certain organizations,

organizations have to pay them salary and provide certain benefits,

apprentice is not employee, but he/she may get some subsidy from the

organizations or individuals.

2. both trainee employee and apprentice are under agreement with

organizations/individuals, but agreement between trainee employee

and organizations should be standard labour contract, agreement

between apprentice and organizations/individuals should be loose

statement regarding learning environment, subsidy/benefits and

contract period.

3. The period of apprenticeship training, which shall be specified in the

contract of apprenticeship, shall be who, having undergone institutional

training in a school or other institution recognised (so you are not

getting that training)

4. The contract of apprenticeship shall terminate on the expiry of the

period of apprenticeship training may be 3 months or 6 months(We

have not hired you for 3 months or 6 months).

Still you consider yourself as a trainees then,

Further, Section 2(9) of the ESI Act has also been amended from 01-06-2010.

In view of the amendment:: ALL APPRENTICES and TRAINEES appointed

under the Standing Orders of the Factories/Establishments are covered under

the provisions of the ESI Act.

Dear friend,

first of all your employer can not force you to pay rs.40,000/- on the basis of appointment letter, if it was so easy then what importance does a bond paper posses. appointment letter is not any legal obligation so he cant take any legal step.

second thing, yes you are eligible for esic because the employee having salary 15000/- or below 15000/- are eligible for esic. you have to pay only 1.75% of 8000/- i.e. 245/-.

Now in case of PF, you need to see your salary break up on the offer letter, if salary break up is not given in offer letter then ask for it from your HR Manager. In your salary breakup if you have basic salary 6500/- or below 6500/- then you have to get your pf deducted as 12% of the basic salary either willingly or unwillingly. But if you have Basic salary more than 6500/- then you have following options:-

-whether you want pf deduction or not, its purely your choice

-whether you want pf deduction on actual basic salary or only on 6500/-, again its your choice

-also no employer can deduct your pf more than 12% without your consent. if you want to increase that percentage say for more saving then you can increase but again employer can not escape from his contribution means increased percentage would be an addition to 24 % (12%of basic salary from employee+12% of basic salary from employer).

PF and ESIC contribution can be deducted from the month of registration only.

If you have any other query, feel free to ask.



Dear Private Employee

Your query seems to be very confusing so First I am trying to put them in order

Q 1. Am I under the provisions of ESI if my CTC is 8000/- ?

A1. Yes, you are under the provisions of the Act

Q 2. Company is asking to fill the forms pertaining to ESI, Should I fill the same ?

A2. Yes. it is mandatory to fill the forms.

Q3. Company has deducted ESI @ 4.75% of your gross Salary. Is it correct ?

A 3. If the share of Employer has been Deducted from your salary then it is illegal. However I think that you are confusing with the concept of CTC v/s Gross / Net Salary. So request you to share your salary breakup so that other members can also give their valuable inputs on the topic.

Q 4. I want to quit the job but is the agreement legal ? Will I have to pay Rs. 40000/-

A 4. If you only signed on the general company policy document then you dont have to worry about anything.

But before you take any step It is suggested that you first discuss the matter with your company HR and get a clarity about the Salary Structure and the so called Bond.


Preetam Deshpande

Dear MR.

First of all i would like to confirm you that about esic and PF applicability.

If your gross salary is less than15000/- then you are eligible for ESIC. and it is mandatory for company to deduct the same.

In case of PF if your Basic salary if rs 6500/- then you are eligible for deduction of PF from your salary which is @12% on the (Basic+DA).

NOW as per the details written by you it is written that you are getting a CTC Of Rs8000/-

When you are getting CTC then PF AND ESIC Employer's share will be deducted from your salary i.e 4.75% for ESIC employer's share will be deducted from your salary

NOW as you told that you have not sign any document, bond , legal paper at the time of joining, company can't take any legal proceeding against you for recovery of rs 40000/-,

So it is advised to you that leave the company in spite of signing the appointment letter along with the company policy letter. because if you leave you will have a lose of maximum a month salary i.e. 8000/-. but if you keeps on continuing the job it may become problems to you and your professional carrier. it will also the wastage of time for your professional growth.


Munish Kumar

Dear All,
I have seen many judgements in favor of employer in concern of appointment letter terms and condition.. If employer has mentioned in appointment letter than He can demand 40K.
Example:- Notice period recover on base on appointment letter only...
This is only my opinion. kindly update me if I am wrong on this case.
Faruk Shaikh

ESCI total contribution is 6.50%
Employee is 1.75 of the basic salary
Employer is to contribute 4.75%
On the other hand EPF
12% from both employee and employer
rest few stuff to be collected from Employer for Account 21 & 22
Account 1,2& 10
Any idea what is the percentage ?
Can anyone tell me What is CTC ?
by example
Pls ...

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