rajneesh-kumar-kesarwani
1

Respected All, Is employer can deduct insurance premium monthly from employees salary?
From India, Delhi
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Saswatabanerjee
Partner - Risk Management
Nanu1953
Ceo-usd Hr Solutions
+1 Other

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s.tiwari@accelindia.com
2

Employer can deduct only employee contribution for the salary of an Employee.

Employer can only deduct employer part from an employee if the selection done on CTC base.

From: Sanjay Tiwari
Dy.G.M.(HRD & IR)
Air Control & Chemical Eng. Co. Ltd.
M: 9727704102

From India, New Delhi
saswatabanerjee
2289

When you ask a question, you need to give all details and the surrounding circumstances.

So, what type of insurance, what is the amount, purpose, whether it was in the employment contract or voluntary
And what is your role in it? Why are you asking the question

From India, Mumbai
nanu1953
257

If the insurance is salary savings scheme ( usually life insurance ) and the employee has been authorized employer to deduct from the salary, the employer can deduct it.

If there is any organization policy for Mediclaim , Group personal accident etc., in those cases it can not be deducted from salary in general rather the premium for those insurances to be paid by the employer.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
ommygautam
57

Under the Section 7 of Payment of wages act ,1936-
" (k) deductions, made with the written authorisation of the person employed for payment of any premium on his life insurance policy to the Life Insurance Corporation of India established under the Life Insurance Corporation Act,"

From India, Rudarpur
JAWAHAR LAL MOONDRA
30

In most of the organizations, many employees do not fall under ambit of ESI Act due to coverage limitation for salary up to Rs. 21,000/- per month. Such employees yet want protection against medical expenses due to any medical emergencies and claim if any one of them meet with an accident at any time during the period of employment whether on duty or not.

In such case, if the organization takes any Group Mediclaim policy, the premium if much less than that otherwise charged from an individual person (employee). The organization also generally takes group personal accident policy with hospitalization benefit (whether named or unnamed - in case whether attrition rate is much higher than normal).

In such cases, the employer is entitle to deduct the premium amount from the salary of the employee and it is generally amount of premium is deducted by dividing the share of premium by 12.

This way the employee is covered under both Mediclaim as well as Personal Accident policy with hospitalization benefit for a lesser premium and premium payable in monthly instalment. The organization is acting as a facilitating agent between the insurer and the employee.

Jawaharlal Moondra
98290 28028

From India, Jodhpur
nanu1953
257

If the employee is not covered under ESIC, then those employees will be cover under Employee Compensation Act ( EC Act). There are insurance available in lieu of EC Act. This is unnamed insurance and statutory need. Therefore, the premium for insurance must be borne by the PE otherwise it will be illegal.

Now come to Mediclaim (hospitalization) & GPA ( Group personal accident insurance ) where both are extra legal. There are organizations where employees/union(s) are interested to cover parents for mediclaim by paying the portion of premium paid by the employees. Usually premium for extra legal items are paid by the PE.

If there is consent by the employees / union(s) agreement , then it may be possible to deduct from salary for paying premium. I have never came across with any organization where employees are bearing the cost of entire premium for extra legal matters and employer is not paying anything. India has huge diversity and I am also learning every day new things when I am very close to 70 years.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi

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