Employee Benefits Dilemma: What Happens When ESIC Limits Are Exceeded?

My question is: what if the employee has crossed the limit, and yet the contribution continues? Will they still be entitled to benefits, and if so, until when?

Regards,
Kim

If the employee crosses the ceiling limit of the wage in the middle of the contribution period, he continues to be an employee for the purpose of ESI benefits until the end of the contribution period and the corresponding benefit period.

Regards,
B. Saikumar

In reference to the above, there are two half-yearly return cycles under the ESI Act. The cycles are from April to September and October to March. During this cycle, let's say the employee's gross salary was less than Rs. 15,000 until May, i.e., the employee has paid the ESI amount for the months of April and May. If the employee's gross salary crosses Rs. 15,001 as of June, ESI will still be deducted from both the employee and employer until September.

From October onwards, a new cycle will start, and hence the deductions for the above case will close. Hope this clarifies.

Regards,
Vinod Kumar
FSL

As explained by Vinod, it is correct. I would like to add one thing: in the corresponding period, he will get the benefit of ESIC.

Regards,

Dear Seniors, We have a peculiar case coming up. One of the employees is covered under ESI, and his wife is receiving treatment at an ESI hospital. She is likely to undergo an operation in a month or so. The employee's wages will exceed the limit effective from 1st April 2012.

Eligibility for Treatment Post-Wage Increase

Is she eligible for treatment from 1st April onwards? Please clarify.

Regards, Kangeyan

Hi Kangeyan, as the employee has made contributions from Oct '11 to Mar '12, he will get the benefit for the next 6 months, i.e., from Apr '12 to Sept '12. I hope there shouldn't be a problem in this regard.

Regards,
Vinod Kumar

I agree with Kumar Vinod. We have two 'Contribution Periods' which are followed by 'Benefit Periods'. For the contribution period from April to September, the benefit period starts from January until June. For the September to March contribution period, the subsequent benefit period starts from July until December. Hence, anybody who has been in the contribution period can avail the benefits until the end of the respective benefit periods.

Regards,
Jayesh