X employee exceed his wage above 21000/- in the month of April . Due to absence /LOP in June his salary is below 21000/-. Can we deduct ESI from his salary further months. Kindly explain/ if any rule.
Dear Phani,
As there is contribution made in the contribution cycle of january to june, you need to complete the cycle of payment of ESIC contribution eventhough there is midterm increase in salary. You can stop paying the contribution in the next cycle due to increase of salary.
You may consider notional wages, ie, the salary which he would have earned had he been employed through out the month and since that notional wages exceeds Rs 21000, you can exclude him from ESI. This principle applies to overtime wages also. Overtime wages is excluded from deciding coverage of employee but is considered for contribution of a covered employee. As such if due to overtime the salary of an employee exceeds Rs 21000, he should not be excluded.
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