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.

Industrial Relations And Labour Laws
Sr. Hr Executive

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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.
From India, Kannur
ESI contribution period varies from April - September and October - March.
If during the period salary increased and exceed the limit , even at that time contribution has to be deducted from employee salary and in the next period deduction would be nil.

From India, Rajkot

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