Are Our Medical Reps Across India Eligible for ESIC Payments Despite Split Salaries?

We are a pharmaceutical company based in Navi Mumbai. We have medical representatives working under us all over India. Their salary plus TA is greater than 15,000, but we are paying them both in split. Are they eligible for ESIC payment?

Eligibility for ESIC Payment for Medical Representatives

If the TA (Travel Allowance) is a consolidated amount and is regularly paid along with the salary (present in the payslip), and because of this, the monthly salary crosses Rs. 15,000, then your medical representatives are out of ESI.

In most organizations, it is generally based on the days/time spent on travel and will be reimbursed separately along with the Travel Allowance as reimbursement. In such cases, it is not part of the salary; hence, the same amount won't attract PF/ESI/PT or even income tax as it is a reimbursement of expenses. In these circumstances, if the gross salary, i.e., salary according to the payslip, is less than Rs. 15,000, then they are to be covered under ESI.

Thanks and regards,
Kamesh

Thank you, Kamesh, for the reply. I have a query. We pay them TA on a monthly basis, and the amount is fixed as per kilometers. We do not pay the TA amount along with the salary, and neither is it reflected on the salary slip. Their salary is paid on the 1st of every month, and the TA amount is reimbursed on the 22nd of every month.

ESIC Calculation Query

So, for calculating ESIC (slab of Rs. 15,000), can we consider their gross salary + TA? For example, if their gross salary is Rs. 10,500 and their TA amount is Rs. 5,000, then can we say that he is not eligible for ESIC?

Thanks & Regards,
Shwe

As per the information provided by you, the TA amount you are paying is a reimbursement and it is not part of the salary or earnings. This is because you mentioned that it is based on the kilometers they travel. Hence, you need to consider the salary as Rs. 10,500/- only and calculate the ESI on the gross salary.

Regards,
Kamesh

If you are paying TA under reimbursement against travel reimbursement, it does not attract ESI. I feel you wanted to consider TA as one component in the salary structure and are looking for an exemption. If you say so, you may avoid ESI, but you need to cover them with Workmen's Compensation, Group Personal Accident policy, and mediclaim insurances as welfare measures. As ESI covers all of the above, it would be good to make employees members of ESI, relieved of the risk involved in seeking exemption. However, the above insurance coverage is necessary for employees drawing more than the ESI limit.