Is My Salary Structure Making Me Liable for ESIC? Seeking Clarity on Exemptions

jishneo
My gross salary is Rs. 15,500. It is divided in the following manner: 13k as my fixed salary and the remaining 2k as my performance bonus. The variable payment (performance bonus), i.e., 2k, is paid to me on a quarterly basis.

Based on this, would I be liable to or exempted from ESIC?

Any help regarding this will be really appreciated.
uma.vivek2000
ESIC is calculated on the Gross Salary. The last slab for the ESIC facility is Rs 15,000/- monthly Gross Salary. Check with your accounts department whether they are mentioning your Gross Salary as 15,500 or 13,000 in your salary calculation and salary statement. If it's 15,500/-, you will not come under ESIC Cover.
jishneo
Hello Vivek. Yes, I can confirm my gross salary is 15,500k. So, can I confirm that it has nothing to do with my variable salary that is paid to me quarterly?
saiconsult
Since your fixed pay is Rs. 13,000/- per month and the remaining Rs. 2,000/- is being paid to you as a performance bonus at intervals of three months, that amount (Rs. 2,000/-) needs to be excluded. Therefore, you are eligible to be covered under ESI.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai
uma.vivek2000
Variable pay does not affect the ESIC rules. According to the new amendment released on 10th May 2010, any person drawing a gross salary of Rs. 15,000/- and below, with his or her dependents, is eligible for ESIC.

Sai Kumar is right in his statement. The performance bonus is an additional incentive. Your gross salary should be considered as Rs. 13,000/- and not Rs. 15,500/-. Please be very clear about your salary structure.

ESIC: An Overview

ESIC is not a liability for which you need an exemption. It is an insurance and medical facility provided to you and your dependents by the Government of India and the State Government at very nominal salary deductions made from your salary. Please check out the ESIC website on the internet.

Benefits of ESIC

ESIC, or Employees' State Insurance Scheme of India, is a multidimensional social security system tailored to provide socio-economic protection to the worker population and their dependents covered under the scheme. Besides full medical care for self and dependents, which is admissible from day one of insurable employment, the insured persons are also entitled to a variety of cash benefits in times of physical distress due to sickness, temporary or permanent disablement, etc., resulting in loss of earning capacity. The confinement in respect of insured women, and dependents of insured persons who die in industrial accidents or because of employment injury or occupational hazard, are entitled to a monthly pension called the dependents' benefit.

Regards
subbarao.v
Apart from the fixed salary, you are paid a performance bonus of Rs. 2000. If your performance bonus is paid regularly, it can be considered a wage slab. Otherwise, it will not be considered part of the fixed salary. If it is paid once every three months, it will not be applicable.

Regards,
V. Subbarao

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