ESI Eligibility Confusion: Are My Casual Employees Covered with Reduced Work Days?

The gross salary of my casual employees is Rs. 18,000 per month. However, due to a shortage of work, I am only able to provide them work for 20 days. Therefore, their earned wages amount to Rs. 12,000 per month for the past year.

ESI Eligibility Query

Will they be eligible to get ESI benefits, or will ESI be discontinued due to the defined gross wages exceeding Rs. 15,000? I need clarity on whether the cap on ESI eligibility is based on earned wages or eligible salary.

ESI Eligibility Based on Earned Wages

Cap on ESI eligibility is not on earned wages but on the rate of wages. In your case, the earned wages of your workers are Rs. 12,000/- every month constantly for the last year. You say that the workers are working every month only for 20 days constantly, and therefore, their earned wages are Rs. 12,000/- as against a rate of Rs. 18,000/- per month.

Now the question is whether you should de-cover the workers from ESIS or continue to cover them under ESIS. According to me, you should continue to cover them under ESIS. You are giving them work for 20 days in a month constantly, and therefore, their rate of wages is Rs. 12,000/- per month for a 20-day month.

One may differ with me. This is my opinion based on the logic as stated above.