Confused About ESI and Employee Compensation Act Coverage for Salaries Over ₹15,000? Let's Discuss!

Coverage Under ESI and Employee Compensation Act

Under ESI, only those employees who are earning up to ₹15,000 are covered. Employees earning more than ₹15,000 per month are covered under the Employee Compensation Act, as they are not included under ESI.

Please guide.

Not necessary. If those drawing a salary above Rs 15,000/- per month are employees as defined under the EC Act, then only they will be covered under the EC Act.

Regards

Then, employees drawing more than ₹15,000 are not covered under any act, i.e., neither under ESI nor under the Employee Compensation Act (EC).

Do they receive compensation in some other way in case of an accident, death, or disease?

On what basis are you saying so? If you have any authoritative reference, please share.

Regards,
Varghese Mathew

I just want to know when ESI becomes applicable to a particular area/industry and EC ceases to exist. Then, if there is some other provision to compensate those employees who are drawing more than ₹15,000 per month.

I would like to take part in this discussion and submit as follows:

Section 53 of the Employees' State Insurance Act, 1948

Section 53 of the Employees' State Insurance Act, 1948, debars only the Insured Persons or their dependents, as covered under the said Act, from claiming compensation under the Employees' Compensation Act, 1923, from the employers. It does not exclude the operation of the Employees' Compensation Act, 1923, entirely from any establishment/factory, which is also covered under the Employees' State Insurance Act, 1948.

Definition of "Employee"

However, the definition of "employee" as mentioned in Section 2(1)(dd) of the Employees' Compensation Act, 1923, along with Schedule-II of the same, is a long list of occupations, which includes factories/establishments defined as "factories" or "mines" in respective Acts.

Therefore, in my opinion, all employees working in occupations as defined in Section 2(1)(dd) & Schedule-II of the Employees' Compensation Act, 1923, are entitled to compensation under the EC Act, as mentioned above (except insured persons and their dependents who are covered under the Employees' State Insurance Act, 1948).

Wage Ceiling Under the Employees' Compensation Act, 1923

Further, under the Employees' Compensation Act, 1923, I have not found any wage ceiling restricting coverage of a particular set of employees getting wages only up to some wage ceiling. If I am not wrong, the employees getting wages exceeding Rs. 15,000 per month (not covered under the ESI Act, 1948) are coverable under the Employees' Compensation Act, 1923, if otherwise defined as an "employee" under the said Act.

Coverage Under the Employees' State Insurance Act, 1948

Further, the coverage under the Employees' State Insurance Act, 1948, is restricted only to implemented areas and to employees getting wages up to the coverable wage limit (presently Rs. 15,000 per month), whereas the provisions of the Employees' Compensation Act, 1923 (as mentioned above) extend to the whole of India.

Perhaps, members will correct me if I am wrong in any way.

With regards;

Is ESI applicable to all firms, or are there any restrictions regarding the number of employees? For example, if a firm has only one employee earning below ₹15,000, can that firm register for ESI for that one employee?

Thanks,
JD

I am fully in agreement with Mr. Harsh Kumar Mehta. The parental or universally applicable act is the EC Act, where the employer has been put under a liability to pay compensation to his employees in case there is any employment injury and because of which the employee has lost his earning capacity.

When the ESI Act has been made applicable to any area and the employer has been registered under the ESI Scheme, the liability of the employer is just taken by the ESI Corporation, and thus all the employees drawing a salary up to ₹15,000 stand covered under ESI. However, in respect of those employees who are drawing more than the ESI limit, the employer has a liability to pay compensation for the employment injury. Section 53 of the ESI Act has significance in this respect. This section debars a dual claim but does not exclude the application of the EC Act to non-covered employees.

I am, therefore, of the view that let the ESI Scheme cover all employees irrespective of salary, but for allowing benefits and contributions, a certain sum can be prescribed. However, there is no response from the ESI Corporation.

I am in agreement with all the opinions shared by senior members. In addition to the above, certain industries have their own Corporate Group Medical policy for employees drawing a salary above ₹15,000 to cover their medical attendance expenses based on their category. Moreover, they are privileged with an Accident policy that provides compensation for any accidents and injuries that occur during work. The formula and amount authorization are determined by management, considering the Cost to Company (CTC) of the respective employees for coverage and policy limits.

Regards,
Eswar