Is Esi Mandatory On Not

The wage ceiling limit is Rs. 15,000/- p.m. from 01-5-2010. It is Rs. 25,000/- p.m. for employees with disability. Contribution is payable on over time payment also. Since over time payment is not a regular payment, it is counted for payment of contributions, to get more cash benefit, but is not counted for wage ceiling. For example, If an employee is getting Rs. 14,000/- p.m., and he gets Rs. 2, 500/- p.m., the contribution is to be paid on Rs. 16, 500/-. Still he continues to be an employee. O.T. is not counted for the purpose of wage ceiling.

There are two six monthly contribution periods in an year. April to September and October to March. In the definition of 'Employee' under Section 2(9) of the ESI Act,the proviso reads as follows:

'Provided that an employee whose wages (Excluding remuneration for overtime work) exceed such wages as may be prescribed by the Central Government, a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period'.

If the wages of an employee exceed the ceiling limit of 15,000/- a month excluding O.T. either in April or October, he ceased to be an employee from that month and no contribution need be paid. However, if his wages exceed the limit excluding O.T. in any other month, contribution need to be paid till the end of that contribution period i.e. up to September or March as the case may be.

Ramana Murty, Hyderabad

As per difination of Wages as per provision of ESI inculdes overtime also , except bonus, washing allowance are not wages.
However, person salary less than 15000/- & if he gets ovetime & he crosses the 15000/- or more than the ESI is deducted on entire amount not up to 15000/-
Regards,
KPR

Dear Mr.Sanjeev,
ESI to be deducted on Overtime also, but the same should not be taken for computation of ceiling.
R.Eagambaram
DGM-P&A
M/s.Global Pharma

Dear Mr.Sanjeev,
ESI to be deducted on Overtime also, but the same should not be taken for computation of ceiling. You are aware that as per the recent amendment in ESI Act, the wage ceiling limit is Rs. 15,000/- p.m. from 01-5-2010. It is Rs. 25,000/- p.m. for employees with disability. Contribution is payable on over time payment also. Since over time payment is not a regular payment, it is counted for payment of contributions, to get more cash benefit, but is not counted for wage ceiling.
R.Eagambaram
DGM-P&A
M/s.Global Pharma[/QUOTE]

Hello Sanjeev,
O.T. amount will dedect ESI definately its mandatory and if arrear have to pay worker or employee they have deduct also ESI.
thanks,
Chander
HR - Exec.

Yes ESI is applicable on OT who is covered under provisions of ESI Act, 1948. Here it is necessary to clarify that monthly coverage limit of an employee is Rs. 15,000/- (based on fixed monthly pay) and even though his earning including OT (which is not fixed nature earning) for particular month is excess to the limit then ESI contribution will be deducted on total amount inclusive of OT. Suppose monthly earning is 14,500/- and OT is 2,650/- then ESI deduction of 1.75% of employee part will be deducted on 14,500/- and 2,650/- subject to round off to next higher rupee in each case. Even if in next month monthly earning is 14,500/- and OT is 3,250/- then ESI deduction of 1.75% of employee part will be deducted on 14,500/- and 3,250/- subject to round off to next higher rupee in each case.

if Salary emoluments less than 15000, then esi applicable on OT
ie. salary is 14000 and overtime is 2000 then esi is applicable
Regards,
Harshad Patel

[QUOTE=Devi1310;1147060]Dear Sir/MadamAccording to my knowledge if considering OT exceeds Rs 15000.00 we have to pay including the exceeding amount.. In your case u have to pay for Rs 13500.00 plus 2500.00 ie Rs 16000.00 and ESi on RS 16000.00My Salary is Rs 15000.00, since this is the May month if i work on May 1st ( Govt Holiday) i will be entitled for 1 xtra day payment and ESi is calculated on that xtra day also.

Dear sanjiv,
Just imagine, who will take responsibility, while an employee has been injured while working in over time. will the ESIC organisation pay for that, if we dont have a practice to pay for ot?
hence the answer is, we are liable to deduct and pay ot ESIC too.
Ravi shankar.S

Dear Friend,
Pls. do not mis-guide, for exemption the gross salary excluding of overtime is considered. Hence if an employee draw salary inclusive of overtime is more than Rs.15,000/- ESI has to be deducted.
Ex: Salary Rs.14,400/- - esic applicable
Salary