We have paid our employee wages of more than Rs 21,000/- after including his monthly production incentive (payable every month) and have also paid ESI for the full amount. This person has been covered under ESI for more than the last 10 years.
However, the ESIC local office is claiming that if his wages are more than Rs 21,000/-, this person is not eligible for ESIC coverage even though this person's basic + DA + HRA is less than Rs 21,000/-. Only for the past few months, after giving an increment and an increase in the incentive percentage, has this person crossed this amount.
Now, at the time of treatment, he has been thrown out of ESIC and is being refused allowance. What should be done?
From India, Sattur
Acknowledge(0)
Amend(0)
However, the ESIC local office is claiming that if his wages are more than Rs 21,000/-, this person is not eligible for ESIC coverage even though this person's basic + DA + HRA is less than Rs 21,000/-. Only for the past few months, after giving an increment and an increase in the incentive percentage, has this person crossed this amount.
Now, at the time of treatment, he has been thrown out of ESIC and is being refused allowance. What should be done?
From India, Sattur
Acknowledge(0)Amend(0)
Consulting an ESI Officer for Clarification
It would be beneficial to seek the opinion of another ESI officer from a different branch because it seems quite strange to deny ESI coverage. From what I understand, the employee is eligible for ESI coverage. The production incentive, as per the government's ESI website, is not considered under the definition of wages, but the monthly ESI deduction percentage can include the amount paid as a production incentive. Even if the 21K limit has been crossed, it is true that until the end of the contribution period of September 2019, the ESI deductions should continue, providing the employee with benefit coverage (except accident coverage) until June 2020, without contributions from October 2019.
This situation seems really confusing. I'm sorry if I have misinterpreted the situation, but I think it would be good if an ESI officer from another branch could be consulted for a second opinion.
From India, Bengaluru
Acknowledge(0)Amend(0)
61It would be beneficial to seek the opinion of another ESI officer from a different branch because it seems quite strange to deny ESI coverage. From what I understand, the employee is eligible for ESI coverage. The production incentive, as per the government's ESI website, is not considered under the definition of wages, but the monthly ESI deduction percentage can include the amount paid as a production incentive. Even if the 21K limit has been crossed, it is true that until the end of the contribution period of September 2019, the ESI deductions should continue, providing the employee with benefit coverage (except accident coverage) until June 2020, without contributions from October 2019.
This situation seems really confusing. I'm sorry if I have misinterpreted the situation, but I think it would be good if an ESI officer from another branch could be consulted for a second opinion.
From India, Bengaluru
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Employee Benefits.doc
Employee Benefits.zip