Harsh Kumar Mehta
Consultant In Labour Laws/hr
Ravi5554
Asst.manager -hr
Sibabrata.majumdar
Management Consultants Legal & Hr
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber
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Hiii all,
I am new to this page
Working as an HR at an IT company ESIC scheme is newly implemented in my company but the employees are having some issues with it because previously it was not there and sudden deduction is hampering their in hand salary .
Kindly suggest if the employees can avoid this scheme by some process.

Hi,
The act also applies to shops and establishments. Generally, shops and establishments employing more than 20 employees are covered by the Act.
Whose gross is less than 15000 they will cover under ESIC
Whose gross is grater than 15000 they will not cover under ESIC

Sir,
1. Enforcement of ESI Act, 1948 in any factory or establishment is a statutory requirement and require compliance by the concerned responsible persons.
2. I think, it will not be fair on the part of any person respecting statutory compliance to suggest any means of such avoidance except as laid down under exemption provisions under said Act.

Hi,
if your organization having 20 or more than 20 employees then you must register under ESIC as well PF and your organization will be applicable for Gratuity act as well.
May it will clear.............

Dear Mr. Siddhesh,

Please remember that the applicability of the ESI Act 1948, is statutory in nature. Recently the threshold limit of coverage has been brought down (by ESIC authorities) from 20 persons in employment to 10 persons. There is no exemption to the persons in employment of Industrial Establishment or Commercial Establishment who fall within the purview of either Factories Act 1948 or Shops & Establishment Act of the respective State, if he /she is drawing 15,000/- p.m. or less. Statutory compliance cannot be compromised with the feelings of the coverable employees at any point of time. The Employer Employee contributions are legally required to be deposited with the ESIC office within the stipulated time. Failing which, the penalties and fines would be attracted suo motu.

Submitted for your kind information. However, if you have any query on the subject, you may please call a Toll Free Helpline number : 1800 11 25 26 (24 x 7)

Praful M Lale

Labour Law Consultant

e-mail:

Dear Mr. Siddhesh,

May I also add the following for your kind information

Coverage under the ESI Act, 1948

APPLICABILITY

Under Section 2(12) the Act is applicable to non-seasonal factories employing 10 or more persons.

Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatres, road-motor transport undertakings and newspaper establishments employing 20* or more persons.

Further under section 1(5) of the Act, the Scheme has been extended to Private Medical and Educational institutions employing 20* or more persons in certain States/UTs.

*Note: 14 State Govts. / UTs have reduced the threshold limit for coverage of shops and other establishments from 20 to 10 or more persons. Remaining State Governments/UTs are in the process of reducing the same.

The existing wage limit for coverage under the Act is Rs. 15,000/- per month ( w.e.f. 01/05/2010).

AREAS COVERED

The ESI Scheme is being implemented area-wise by stages. The Scheme has already been implemented in different areas in the following States/Union Territories of Indian Union.

STATES

All the States except Manipur, Sikkim, Arunachal Pradesh and Mizoram.

Trust the above clarifies the matter.

With regards,

Praful M Lale

Labour Law Consultant

Dear Friend,
An excellent note on the coverage of ESI Act narrated by Mr.Lale. It clarifies legal position and will be very helpful to HR Professionals.
It is correct that 14 State Govt have reduced threshold limit for coverage in respect of Shop & Establishment from 20 to 10.In the event,10 employees in a establishment are employed and all are drawing a salary more than Rs 15,000/ per month , such establishment will be required to take registration under ESI Act. They need not require to pay ESI contribution since salary all employees is exceeding Rs 15,000/ (beyond ESI limit) in spite of taking ESI registration/coverage.
ESI contribution is payable if salary of an employee is not exceeding Rs 15,000/ per month - gross. ESI Contribution is payable @1.75% -employee and @ 4.75% employer's respectively.
Half yearly return needs to be submitted - April to September and Oct to March.
Sibabrata Majumdar
Management Consultant Legal & HR

There is no option to avoid ESI by the employees covered. The Company must implement the Act and rules. To clear your further issues, you can approach the local office ESI authorities.
As a HR it becomes your role to explain all employees covered under ESI to explain the benefit of the Scheme, for a meager amount of 1.75% of their Total Salary for the month, if we calculate to the maximum salary covered under ESI it wont be more than Rs. 262.50 per month and the benefit covered under it is very much higher than what is paid.
Dear All,
This is just update that now only three States remain in which the threshold limit of employees is not yet reduced. They are HP, Assam & Maharashtra. This topic is discussed earlier in this forum.

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