Navigating ESI Deductions After Salary Hikes and Handling Permanent Card Delays in HR

Hello HR Scholars, I am an HR manager in an IT company and I have two queries.

ESI Deduction After Salary Increment

First, is it compulsory to deduct ESI from an employee's salary if they received an increment in December? I have not done so before.

Permanent Card Collection Issue

Secondly, although I have provided TIC to all of them, even after approximately 1 year, they are still not going to collect the Permanent card. What should I do now?

Dear Rutika,

Reply to Your 1st Query:
For ESIC, there is a contribution period from April to September and October to March. If an employee becomes non-eligible or exits ESIC due to a salary hike during this period, you still cannot stop their contribution until the next contribution period begins. You must continue contributing based on the revised salary until the next half-yearly contribution period commences.

Reply to Your 2nd Query:
Providing the TIC is the basic and major responsibility of the employer. However, once the TIC is provided, the employee needs to visit the regional ESIC office to obtain the PIC (permanent card), with proper guidance from the employer. Not having the PIC can affect the employee and their family's ability to receive benefits. Moreover, nowadays, if you have a sufficient number of employees who have not obtained the PIC yet, the ESIC authority will organize a campaign at your premises. Simply coordinate with your regional ESIC office for this arrangement.

Please let me know if you need further clarification or assistance.

Best regards,

I would like to submit that the appropriate Branch Office of ESIC to which the employee/insured person is attached is the correct office for issuing or arranging for the Permanent Identity/Family Identity Card of the said Insured Person. The HR personnel of the covered factories/establishments, in my opinion, should maintain liaison with the Branch Office of ESIC and assign their employees/insured persons to obtain the said Cards.

The Regional/Sub/Divisional Offices of ESIC are not involved in the preparation of such Identity Cards.

Thank you.

I believe that ESIC is under the central government. To my knowledge, regional ESIC offices are conducting campaigns for the process of issuing PIC cards. These campaigns include document work, taking photos, and other necessary procedures. Although they may provide the card, they also assist in completing the process and forward the necessary information to the relevant authorities for further processing. Please correct me if I am mistaken.

Regards

Thank you for prompting me to further clarify the issues raised by you. I would like to inform you that the Regional/Sub/Divisional Offices of ESIC are indeed conducting campaigns through advertisements, etc., for the preparation of Permanent Identity Cards for Insured Persons and their families. However, in reality, such cards are prepared at the local level under the supervision and control of the Branch Manager of ESIC. The Branch Office is the appropriate office for the preparation of these Identity Cards/Family Identity Cards.

The Regional/Sub/Divisional Offices of ESIC are higher offices of ESIC and do not directly deal with insured persons/employees. It would be even better if you could confirm the local position as well, especially where your establishment is located.

I hope this clarifies the process for you.

Best regards

Understanding ESI Contribution Periods

You may be aware that as per the ESI Act, there is a contribution period from April to September and October to March. During this period, if any employee's salary increases and crosses the ESI coverage limit, i.e., exceeding Rs 15,000 per month, you will have to continue to pay ESI contributions till the end of the contribution period. For example, if an employee was drawing a gross salary of Rs 13,000 per month in December and then, due to an increase in DA and increment, their gross salary rises to Rs 16,500 per month from January, you will need to pay ESI contributions on the enhanced salary till March. Therefore, you do not need to pay ESI contributions for the contribution period commencing from April to September.

TIC and PIC Process for ESI

Unless the TIC (Temporary Identification Certificate) is created, you cannot cover any employee under the ESI. With the TIC, along with a family photograph duly signed by the employer, the concerned employee, along with his/her family members, should visit the local ESI office to obtain permanent cards, subject to fulfilling all formalities, such as providing photographs, etc. Once the PIC (Permanent Identification Card) is ready, the ESI authorities will forward it to the employer for handing over to the concerned employee. With the permanent identification card, an employee can avail the facility "Any time and anywhere," of course within the country.

Regards,
Sibabrata Majumdar

Management Consultant Legal & HR

Kolkata, Mb: [Phone Number Removed For Privacy Reasons]

Hi, I am here again for my query regarding ESI contributions, particularly on enhanced salary during the contribution period. As you have mentioned, in the ESI Act, there are two contribution periods - April to September and October to March. During these periods, if an employee's salary increases to the extent that it crosses the ESI coverage limit of Rs 15,000 per month, you are required to continue paying ESI contributions until the end of the contribution period. For example, if an employee was earning a gross salary of Rs 13,000 per month in December and then, due to a raise in DA and increment, their gross salary increased to Rs 16,500 per month from January onwards, you will need to pay ESI contributions on the enhanced salary until March.

I hope that my message is clear. While the Act defines the ESI Limit of Rs 15,000, it does not specify the treatment of wages for enhanced salaries during the contribution period. If there is any written information available on this, I would appreciate it if you could share it with me.

Regards,
Bhupinder