If an employee chooses to continue with ESI even after his/her salary was hiked above 21,000/- limit, what will be the employer contribution? Is it zero, 4.75% of 21,000 or 4.75% of the new salary?
7th March 2019 From India, Kottayam
There is no provision in ESI Act permitting an employee to exercise option to continue to be covered by the ESI if his wages exceed Rs.21000/-pm.However where such hike beyond Rs 21000/- occurs after the start of the contribution period, he can continue to be covered till the end of the contribution period.
B.Saikumar
HR & Labour Relations Consultant.
7th March 2019 From India, Mumbai
Thank you Sai for your response.
8th March 2019 From India, Kottayam
In case the hike happens in between a contribution period, do we have to deduct 1.75% / 4.75% of 21,000/- or the new gross salary?
8th March 2019 From India, Kottayam
Yes, you have to deduct employee and employer contributions at the existing rates till the revised rates come into force.
B.Saikumar
HR & Labour Relations Consultant
9th March 2019 From India, Mumbai
on gross wages only, if any body knows the sec. / rule pl. let us know.
Regards,
Srinivas
28th June 2019 From India, Hyderabad
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