Hi Shalin,
Under the provision of ESI Act the defination of wages is very wide. Now a dys every payment payment made to workman is treated as wages and the contributions are payable by employee and employer. Under Section 2(22) 'wages' means all remunertion paid or payable in cash to an employee if the terms of contract of employemnt, expressed or implied were fullfilled and includes any payment to an employee in respect of any period of authorised leave, lock out, strike which not illegal or layoff and other additional remuneration it any paid at intervals not exceeding two months, but does not include
(a) any contribution paid by an employer to any pension fund or provident fund or under this act,
(b) any travellig allowance or the value of any travelling concession,
(c)any sum paid to the person employed to defray expenses entailed on him by nature of his employemnt or
(d) any gratuity payable on discharge
In short any payment made to worker regular basis shall be treated as wages and contributions are payable.Payment of increment arrears will be treated as wages and contribution are payable, where as agreement arrears will not. Annual bonus is not wages under ESI Act where as production/incentive bonus which is paid every month will be wages. Leave encashment during the period of service may be treated as wages whereas leave encashment at time of discharge or superannuation will not be treated as wages.
In your case the additional payment of Rs 500/- will be treated as wages and contribution will be payable. For more details/clarification you may contact me.
Hope this suffice your purpose.
Thanks
avinash Kanoray
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