ESIC Act Coverage: Should Companies with Salaries Above Rs. 10,000 Be Included?

Dear All,

Suppose an organization employs 200 employees, and all their salaries are more than Rs. 10,000. Should it be covered under the Employees' State Insurance Corporation (ESIC) Act of 1948?

Kindly let me know your views.

Sinju George

Dear Ukmitra,

Thank you for the prompt response. In the same organization, if 7 employees' salaries are less than Rs. 10,000, should they be covered or not?

Sinju George

Yes, Sinju, you will have to. Do take your time to read the policy line by line; that is what I did when I started with HR. It's very boring, but it will be very helpful in the long run. In fact, I had made a FAQ based on my queries. Unfortunately, I did not take it when I resigned from the firm.

Ukmitra

Dear All,

Please let me know if it is possible to cover all employees under mediclaim instead of ESI irrespective of salary structure.

Please help me.

Archana

Hi all,

If your staff's salary is more than 10,000/-, then there is no need to cover them under ESI. However, I believe you still need to have a Workers' Compensation (WC) policy in place.

Best regards,
Mahesh

Re: Applicability of ESIC Act if all employees' salary is more than Rs. 10,000/

If the salary is Rs. 10,000/-, ESI is applicable. However, if the salary is Rs. 10,001, the ESI Act does not apply. Employees in this case will be exempt from availing ESI benefits.

Kiran
HR Executive
Delhi

Hi All,

I am pursuing an MBA. Three months have already been occupied in the same field. Earlier, I worked as a recruiter. I am looking forward to some internship or training in an organization where I can learn and implement HR terms, policies, and much more—not just recruitment.

We all know HR is a wide spectrum and doesn't end with recruitment. However, whenever I try to seek opportunities in other HR areas, I always end up back in recruitment. I am frustrated with the low salary and the same old profile. If this continues, regardless of having an MBA or more qualifications, I will still be labeled as a recruiter—endless phone calls, just like working in a call center.

Can anyone help me with how to transition into a full-fledged HR role and envision myself as an HR executive in the future? I have heard that certain companies offer trainee positions, which could be a good starting point for someone like me.

Can anyone please assist me in navigating through this situation?

Megha
login2megha@gmail.com

Hi all,

If your staff's salary is more than 10,000/-, then there is no need to be covered under ESI. However, I think you should consider having a workers' compensation policy.

Applicability of ESIC Act if all employees' salary is more than Rs. 10,000.

If the salary is Rs. 10,000, ESI is applicable. However, if the salary is Rs. 10,001, the ESI act does not apply, and employees are exempt from ESI facility.

Dear Sanju,

As eligible employees are less than 10/20, you are not required to take the ESI code. Legally, you are not bound to take any other policy as well. As a welfare measure, you can take it voluntarily.

Dear Mr. Sinju,

First, let me know when your organization or establishment started and whether the area was covered at that time because, as you mentioned, 200 employees, and I don't think it is a one-day process. So, as per your balance sheet and incorporation certificate, if you are covered, then you have to apply and even pay back wages as per the Act. Furthermore, you also mentioned that if 7 employees are under the coverage limit, so it means it is applicable as mentioned by Mr. Malik.

Just apply with all documents required and get a provisional code to avoid further problems.

Regards,
Ramnath

Dear Mr. Malik,

Thank you for the suggestion. In one of the cases we have in Raigad district, we were asked by the ESI officer that we will have to include the staff under 6000 (at that time) for ESI since we have staff more than the stipulated count. The argument was that all such employees must have coverage under ESI as per the Act, even if we have covered them under a separate group policy. We were actually paying for both, and since the count was less, we never bothered.

Your comments, please.

Ukmitra

Dear Friends,

As per the ESIC Act, every organization with 20 or more employees (including directors) should register with ESIC, irrespective of the salaries. So please understand that even if the employees are not eligible for ESI, the concern shall be covered under ESI.

There may be a chance in the future that an employee with a salary less than 10,000 may join. Therefore, ESIC registration is mandatory.

Thank you.

Yes!! Organizations must be covered according to employees' strength. However, in ESI return, the contribution shall be 0 as the ESI limit is crossed.

Please feel free to comment if anyone has a different view on this.

Dear Sinju George,

The number of employees is the deciding factor for the coverage of an organization, and salary is the determining factor for the coverage of an employee. Concerning your organization, it should be covered under E.S.I. (the Act becomes applicable if an establishment employs 10/20 employees, as the case may be). However, the coverage of an employee is based on their salary, up to Rs. 10,000.00. Since the salary in your organization is more than Rs. 10,000.00, the employees will not be covered under E.S.I.

Based on the information provided in your query, E.S.I. is applicable to your organization, even though the employees are not covered. You are required to submit a nil return as prescribed under the Act.

Please let me know if you have any specific queries on the subject.

Thanks,
Mohd. Arif Khan
9891578605

Hi,

ESIC is only applicable to those employees in the company who are drawing gross wages up to Rs. 10,000 per month. In companies where an employee is not drawing gross wages of Rs. 10,000 per month, even though the company falls under the coverage of the ESIC act, the employees will automatically be out of the coverage of the Act and Scheme.

Regards,
Sweta Sarkar

Dear Local ESIC Office,

I am writing to address an issue regarding our organization's current situation. We have 200 employees in our organization, but their salaries exceed Rs. 10,000. We seek your advice on the coverage rule under the ESIC Act 1948 in this scenario.

Thank you for your attention to this matter.

Sincerely,
AJAY

Dear all,

No!!! As per the act, whoever's salary is less than 10k, they are eligible for ESIC.

Regards,
Sukesha Shetty

Dear All,

My question is very clear. If a power-using organization is employing 10 or more persons and their salary is less than Rs. 10,000/-, then the organization should be covered under the ESIC Act of 1948. But my question is, if a power-using organization is employing more than 10 employees and only 5 employees' salary is less than Rs. 10,000/- (as per the limit) and all others are getting more than Rs. 10,000/-, then should the organization be covered under the ESIC Act or not? I request all of you to clarify this instead of just saying yes or no.

Thank you,
Sinju George

Hi!

The ESI coverage is for the establishment, and the coverable gross salary limit is Rs. 10,000/- Even if all the employees earn more than Rs. 10,000/-, the establishment will still remain under coverage. The company, as a principal employer, is responsible for the service provider/contractor's employees if they earn less than Rs. 10,000/-.

The coverage will cease only upon the legal closure of the company, such as winding up, merger, or amalgamation.

R. Muralitharan

Hi Sinju,

Their salary is more than Rs. 10,000/-, then should it be covered under the ESIC Act of 1948.

NO

Dear All,

Suppose an organization employs 200 employees, and all their salaries are more than Rs. 10000, should it be covered under the ESIC Act 1948.

Kindly let me know your views.

Sinju George

If any employee gets Rs. 10001 per month, then they will be exempted from the ESI rule. However, if the washing allowance is included in their salary, then you have to pay the ESI contribution. For example, if the salary is Rs. 10500 and the washing allowance is Rs. 750, then you have to calculate the contribution on 10500 - 750 = 9750 and pay the ESI on 9750.

Feel free to revert.

Regards,
Ravi Kulkarni
HR Manager

Dear friend,

When considering the coverage of an establishment under ESIC, 20 persons drawing less than 10,000 per month are to be included. This includes individuals in roles such as office boys, security personnel, sweepers, etc. Additionally, if the establishment employs contract workers, such as security guards or housekeepers, without a separate ESI code number, these employees should also be considered along with your regular employees.

Thank you.

Hi,

As you are employing more than 20 employees, as per statutory regulations, you should cover your establishment under the ESI Act. You can treat all the employees who are drawing more than Rs. 10,000 per month (excluding Overtime Wages) as exempted employees and should send periodic nil returns to the authorities.

Regards,
R G NAGENDRA

Applicability of ESIC Act if all employees' salary is more than Rs. 10,000.

If the salary is below Rs. 10,000, ESI is applicable. However, if the salary is Rs. 10,001, the ESI Act does not apply. In such cases, you must arrange other medical facilities for the employees. Simultaneously, you must apply the Maternity Benefit Act for female workers.

Thanks & Regards,

A. PALPANDIAN

Officer - Human Resource

Hi all,

I am new to HR and need your advice/help with the following questions. Under the ESIC act for a pharmaceutical company, are there any stipulations on the leave policy? Secondly, since it's a startup company, there is no implementation of any gratuity rules. Is this illegal as per the act? We have around 70-80 office-based and around 800-1000 sales/field staff. What are the other ESIC-related rules that would apply to a pharma company?

Please help!

Hello everybody,

Recently, on the 19th of February 2010, the Labour Ministry, in a meeting, decided to increase the wage ceiling for ESI coverage from Rs. 10,000/- to Rs. 15,000/-. The date of implementation is not yet decided or declared. This may take time due to procedural aspects of passing the notification, etc. When this is implemented, the exemption will be for incomes from Rs. 15,001/- and above. It is possible that the number of eligible employees in your company may increase to 10 (minimum required if using power) or 20 (minimum required if not using power), making you legally liable for coverage.

Therefore, please wait for a couple of months before committing to an alternate scheme, assuming you are not liable for ESI scheme coverage.

Regards

Hi,

Even if you have more than 200 employees and if all their salaries are more than Rs. 10,000, you should still register with the ESI Authorities and submit NIL RCC. In the event of an accident occurring during the course of employment, you are required to pay compensation as defined in the Workmen's Compensation Act of 1923.

Hello,

I worked for Infosys BPO in Bangalore, and my gross salary has been over 10,000 since June 2009. Please confirm if the correct procedure was followed. You can contact me at my email address Tenzing_79@indiatimes.com.

Thank you,
Suparna Dutta

ESI Contribution is deducted from the gross salary.

With Regards, R.N.Khola

As per the latest policy, an employee who is drawing below Rs. 15,000 only is eligible for ESI.

Regards,
Raghavendra
HR

Applicability of the Act

Under Section 2(12), the Act is applicable to factories employing 10 or more persons, irrespective of whether power is used in the process of manufacturing or not.

Extension of the Scheme

Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas, including preview theatres, road motor transport undertakings, and newspaper establishments employing 20 or more persons.

Accordingly, you have to consider the number of employees included in your housekeeping personnel, casual employees (directly recruited by you), and contractors like security personnel. Housekeeping personnel (without an ESI code) are to be considered as your employees. For example, if your role has 200 employees with more than 10,000 rupees salary and even 1 person drawing less than 10,000 is taken as a casual employee, your establishment is to be covered under ESIC.

ESI Contributions and Employee Eligibility

What happens if ESI contributions are made regularly but employees don't have an ESI card and/or ESI number? In such a case, does the contribution go to waste? Is there any recent circular on this? In case an employee meets with an accident, will he/she be eligible for the ESI benefit?

Please help by responding with your views and necessary sections and judgments if any.

Enclosing the latest ESIC amendment. Please go through the same.

Regards,
Shish Uniyal

Dear Sinju,

Please refer to the latest amendments in the ESIC Act. Now, organizations employing more than 20 persons and employees drawing a salary up to Rs. 15,000 are compulsorily to be covered under the ESIC Act.

You can download the recent notification in this regard to get more clarity.

Regards,
Malini

Can someone guide me on the following? In an office where all employees (more than 100) have salaries above Rs. 15,000, is it still necessary to obtain an ESI registration code? Will there be a need to file a nil return? Please guide as soon as possible on this.

Thanks,
RC

Dear all,

I want to know, is the ESIC Act applicable in Palanpur District? Kindly revert with any circular copy or evidence.

RuNaL

Sir, it will be better if you confirm the position from the nearest office of ESIC in the State/District where your unit is located. Even if somebody in this citeHR confirms, the same will not be authentic. In some regions/sub-regions of ESIC, the list of implemented areas is exhibited on the website of the said office. Hope you will take action accordingly.