ESI Insurance for Pvt Ltd Companies: Is It a Must for Employees Earning Under Rs. 15,000?

It is mandatory for a Pvt Ltd company to provide ESI insurance to employees (more than 20) below the Rs. 15,000 wage limit.

Yes, it is very clear in the ESI Act that either directly or indirectly, if they are now earning below Rs 15,000, they are covered under the ESI Act.

Thanks.

Regards,
R. Parameswaran

ESI Applicability

ESI is applicable only for the establishments or factories located in implemented areas, which are notified as such. The Act is not applicable to the units located in non-implemented areas. The list of the areas implemented is available at ESIC local offices.

Regards,
PRATAP

Based on the information provided by you, the ESI Act is applicable to your private limited company under Section 1(3) of the ESI Act, 1948. The act applies to all factories and specified establishments employing more than 20 employees. Therefore, it is a statutory obligation for your company to register the organization if it falls within the implemented areas. The registration process can be completed by submitting Form 01 along with the necessary enclosures to the Regional ESIC Office.

It is important to note that the wage limit of Rs. 15,000 is only used to determine whether contributions are payable concerning a specific employee. If the number of employees in your company earning less than Rs. 15,000 is less than 20, but the total number of employees employed by you or through a contractor exceeds 20 (regardless of the wage limit), the ESIC Act is still applicable.

Thank you.

Thank you for the replies. I was under ESI insurance along with hundreds of fellow employees until March 2013, so my company falls under the ESIC Act. However, surprisingly, from April 2013, it denied ESI insurance to us as we were earning more than Rs. 15,000 along with incentives.

Salary Structure and ESI Eligibility

My salary structure is a net pay of Rs. 12,000 (basic + all fixed allowances). Incentives based on my performance range around Rs. 5,000-10,000. I do not earn incentives every month, and my gross pay for a few months in a year is just my basic, i.e., Rs. 12,000. I believe ESI eligibility is calculated based on net salary and not gross salary, which is not constant.

I received the explanation that it is the company's decision to provide ESI insurance and determine who is eligible for it. However, employees who earn less than Rs. 15,000 and have a higher net pay than me still receive ESI insurance. Please provide me with a response.

Effective from 2nd January 2013, the number of employees required for ESI coverage has been reduced to 10.

Thank you.

Coverage of Factory/Establishment

First, this Act is applicable to all non-seasonal factories utilizing power and employing ten or more individuals. It is also applicable to non-power using manufacturing organizations and establishments employing 20 or more persons for wages falling within an implemented geographical area. Currently, employees of establishments, companies, or factories falling under the coverage ambit and earning wages not exceeding Rs. 15,000 per month are covered under the ESIC Scheme.

Under Section 1(5) of the Act, the provisions of the ESIC Act have been extended to the following classes of establishments:

- Shops and Commercial establishments
- Cinemas, including preview theatres
- Hotels & Restaurants
- Clubs
- Newspaper establishments
- Road Motor Transport establishments

Under Section 1(5) of the ESIC Act, the Indian Government is empowered to extend the Scheme to any other establishment or class of establishments, whether commercial, industrial, agricultural, or otherwise, with time. A State Government may extend the provisions of this Act in consultation with the ESIC and with the prior approval of the Central Government, after submitting a six-month notice of its intention in the official gazette. It is provided that where the provisions of this Act have been brought into force or implemented in any part of the State, the said provisions shall stand extended to any such establishment or class of establishments within that part. This extension applies if similar establishments or classes of establishments have already been covered in another part of the same State.

Thanks,

Srinivasan
Resolve Business Services

If our company workers are working in another company for the completion of projects or buildings for a few months, and all our workers are covered by a Workmen's Compensation policy as ESIC is not applicable to us. However, that other company is applicable to ESIC, and they are submitting ESIC contributions for our workers for the said period, and this contribution amount will be debited to our company.

In view of the above, is this right? Hope you will reply to the same.

Thanks and Regards,
Suhas Deshmukh

Please submit documentary proof of coverage under the Workmen's Compensation Act to the other company for exemption from ESIC.

Hi,

Is ESI mandatory in a printing factory, and what is the calculation of ESI?