Esi Contribution On Arrears Of Wages

dear all
I would like to invite comment on query whether company is liable to pay ESI
on arrears of wages.somoetime VDA notification is received late and we are bound to pay arrears of VDA from retrospective effect.sometimes we give increament from back date and pay wages from back date. whether we are required to pay ESI on these arrears.please comment

Dear Sir,
as per above statement VDA is part of Gross salary if VDA raises so automatically gross also be raised,
sometimes company provide Arrears from April to July in Aug so we have to pay arrears in esic also.

Dear Nagar
But why not deduction On ESIC account ,Please justify Why PF to be deducted and why not ESIC.

It all depends on the date on which the VDA is announced. All arrears payment relating to the periods prior to date announcement is not to be considered for payment of contribution.All VDA payments made after date of announcement VDA whether in arrears or current will attract ESI contribution

Dear All,
The Payment of ESI contributions is more and more beneficial to the employee to avail daily rate of benefits, sickness benefit, maternity benefit, disablement benefit and cash benefit. There may be chances for belated announcement of VDA points and the employer salary revision may take 3 or 4 months after it becomes due. So, the provision should not be misconceived and the employer may circumvent this provision to make a short payment on the statutory payment.
The purpose of the Act, is to extend social security benefit to the weaker section (employees). Therefore, as per the principles of natural justice the benefit of doubt always go the weaker section. Hence, the EPF contribution is must on arrears payment the reason may be whatsoever.

Dear Mr.Malik,
Refer to your query to the above subject, there is no necessity on the part of employer to pay ESI Contributions on Arrears. In this connection, pl refer the information as shared by one of our member in ESIC Employer\'s Guide.
Thanks & Regards,
V R RAO PULIPAKA.

Dear All,
The Contribution on Arrear Wages is applicable only under EPF Act. There is no such provision under the ESIC Regulatations.

Sir(s),
The contributions on arrears of wages paid to any employee is payable under ESI Act, 1948 from the date the said enhancement of wages is announced by the employer.

Dear Harsh Kumar ji,
This old discussion you made it live but with wrong answer. One of the contributing members Amit_thkr86 has given a documentary evidence on ESI is not applicable on arrears. You are requested to please have a look on it. If you have any thing contradictory to it, please come out so that the members can correct themselves / up date their knowledge.

Dear Korgaonkar ji,

I feel it very sorry that a senior member like you have termed my remarks as wrong.

While writing my remarks in these columns, I have added nothing from myself. Rather I have tried to place before the members the correct position regarding payment of contribution under ESI Act, 1948 on arrears of wages paid to employees.

The Employers' Guide of ESIC to which one of the member has referred lays down "......the liability towards payment of contribution accrues only in the month in which the decision is announced and no contribution is payable on the arrears pertaining to the period prior to the month of declaration/announcement."

Sir, for example if in any establishment covered under ESI Act, the decision to enhance the wages is announced/declared in the month of January, 2014, but the arrears of wages are calculated and actually paid by employer in the month of April, 2014, then in my opinion, contribution on such arrears of wages for the period from January, 2014 to March, 2014 will be payable.

I hope your goodself will correct me if I am wrong in any way. I may, however, also add that the term " wages" as defined under Section 2(22) of said Act defines “wages” as"all remuneration paid or payable".