Understanding ESIC Contributions: Why Do Employers Pay More Than Employees?

Can anyone tell me why the ESIC contribution for employees is 1.75% and why the employer's contribution is 4.75%? Why is there a difference between them?

Dear Ruchir Shah, that's true. Once a contribution is paid for a period, it is compulsory to pay until the end of the contribution period unless the employee resigns or leaves the job. So, dear, you have to pay your ESI contribution until 30th September 2011, and from 1st October 2011, you will be out of coverage.

In my opinion, employers will get relief from the Workmen's Compensation Act and the Maternity Benefit Act. Hence, their share is more than the employees'.

Further, being an employer, it is their responsibility to look after the welfare of their employees for better productivity.

Purpose of ESIC Introduction

ESIC was introduced for social legislation purposes to alleviate the burden on employers in terms of managing medical, accident, and illness-related issues. It also aims to provide substantial benefits to employees from the government.

To all, please guide me regarding the amount of wages on which ESIC is applicable. If a person is drawing more than fifteen thousand rupees per month, and if he draws less than fifteen thousand rupees in a month due to absenteeism, in that case, will ESIC deduction be applicable?

Regards, Parashar

My increment comes, and then my salary is Rs. 15,015/-. My HR manager said to me, "Your salary will be revised in July '11, so up to Sep. '11, your ESI will be deducted." He said if we deduct in April '11, then up to Sep. '11, we have to deduct. Is this true???

Yes, this is true as per the ESIC Act. If the contribution period has started, they have to deduct.