Opting Out of ESI: Can Employees Cancel and Get Their Deductions Back?

I have a small clarification. If an employee does not want to be an ESI member, what is the procedure for opting out? I also want to know if the employee cancels their ESI membership, will the monthly deducted amount be paid to the employee? The salary of the employee is $14,550.

Awaiting your reply...

Thank you.

As per the ESI Act, every employee working in the organization is to be covered under ESI, and contributions shall be paid. Only those employees whose monthly salary is more than Rs. 15,000 are exempted from ESI contributions. ESI will not refund the deducted amount in respect of contributions made by the employee.

Regards,
Suresh

Dear members, ESI is not a voluntary scheme; it is mandatory if you are working in an ESI-covered factory/establishment and drawing a wage below the ceiling of 15k. It is not similar to EPF for refunds.

With regards,

Mr. Senthamizh, you know very well that ESI should be exempted if the salary is more than Rs. 15,000/-, but you are stating Rs. 14,550/- to be exempted from ESI. How is this possible? This is not based on the will and pleasure of the individual employee. You must increase the salary; otherwise, your employee is liable to pay.

Regards,
V. Subbarao

ESI Deductions for Employees Earning Below 15,000

All employees whose salary is below ₹15,000 must have ESI deductions. It is a statutory obligation on the part of the company, not the choice of the employee. The government has framed these rules, considering various factors for employees earning that salary. If the company can raise an employee's salary above ₹15,000, then ESI deduction is not required; only PF deduction needs to be made.

Regards,

Clarification on EPF & ESI Coverage After 58 Years

I have one clarification: after 58 years, is an employee mandatorily covered for EPF & ESI?

Regards

Statutory Obligation of ESI Membership

It's a statutory obligation and cannot be excluded if the ESI wages are less than Rs. 15,000. It is the employer's responsibility to follow the norms of the ESI Act.

Understanding ESI Coverage and Exemptions

The ESI is a unique, multi-dimensional, and self-financing social security scheme in which every contributor is a beneficiary or benefactor. I don't understand why you are not interested in the coverage. It has a host of benefits for you as well as for the employer, who cannot provide separate medical benefits and insurance coverage for their employees. You have no choice but to be covered under the ESI scheme as you are drawing a salary of less than Rs. 15,000/-. There are only two exceptions based on the following grounds:

(i) Persons employed in a non-implemented area by a covered establishment can be exempted on application made to the corporation.
(ii) Persons employed in a covered establishment or factory having headquarters in an implemented area but who remain away for over seven months can be exempted on application, subject to certain prescribed conditions.

Regards,
BS Kalsi

Please add Rs 692 towards the employer's contribution of ESI in the employee's salary with the approval of your employer. This will ensure that the individual's gross salary exceeds Rs 15,000 and they are no longer covered under ESI.

Regards,
N N Ataraajhan, Sakthi Management Services

Clarification Regarding ESI Member Cancellation

Even if the employer increases their salary and fixes it above ₹15,000, we still need to pay contributions up to March 2013. The coverage provision will only be activated in the months of October and April.

Actually, employer contributions amount to ₹691.00 for ₹14,550.00. If we add this amount to the remuneration, we can avoid further paperwork.

Regards

It is not a question of reducing the paperwork or denying him the benefits of social security. Here, we cannot assure him of these benefits if he crosses the ESI limit of Rs. 15,000 within one or two months. The comments here are based on earlier discussions. Moreover, some companies provide better medical benefits than the ESI organization, e.g., FACT, etc.

Regards

Exemption from the ESIC Act

If you want an exemption from the ESIC Act, Sections 87 to 19A deal with the exemption of establishments and employees from the provisions of the Act. These sections state that "the employees of such factory or establishment have been receiving benefits which are either substantially similar or superior to the benefits provided under the Act."

Regards,
Dashrathsinh Jhala

Every employee whose salary is more than 15,000 is not covered under E.S.I. In your case, the salary of the employee is 14,550. According to the E.S.I.C Act of 1948, the employee must be covered under the E.S.I.C Act, and the amount that you have submitted is not returnable because that amount is given to the E.S.I.C authority and is used to maintain the E.S.I.C hospitals and dispensaries.

The amount that was deducted is also useful for the employee. In the case of an accident or any other disease, the employee can fully utilize the E.S.I hospital and dispensary.

Regards,
Your friend