Salary Hike Concerns: How to Handle ESI Limit Changes with Family Health in Mind?

My salary is exactly $15,000. My salary is going to increase at the end of this month. However, my father is facing some health problems. I am concerned whether there might be any changes to the ESI limit. If so, I may not want my salary to increase.

ESI Act Coverage and Contribution Period

The provisions of the ESI Act, 1948, are compulsory in nature, and you cannot exercise your option once your wages exceed the coverage limit.

However, as you mentioned, if you were covered under the ESI Act at the start of the contribution period, then despite an increase in wages beyond the coverage limit, you will continue to be covered until the close of the respective contribution period. Therefore, if you were covered in October last year, you will remain covered until March 2016, which is the close of the contribution period. You can also check your eligibility with the appropriate Branch Office of ESIC to which you are attached. For medical benefits, the entitlement will continue up to the respective benefit period only.

The ESI limit is still up to and including Rs. 15,000, and nothing has been heard in recent days about any initiatives from the appropriate authorities regarding its enhancement.

You may continue taking treatment until April 2016, even if you received an increment in salary, with the condition that your increment should occur after the month of October 2015.

Dear Naresh,

No problem if your salary will be higher than your contribution; it will still be on ESIC till the end of March.

Whether you want a hike in your salary, that is absolutely your call. Whether management will go as per your wish, that is also up to them. However, there was a proposal to increase the limit of ESI deduction up to INR 25,000 gross salary, but to date, that has not come into force.

Thanks,
Aparajita Banerjee

Mr. Naresh,

You can do one thing: convince your employer to keep your gross salary at 15000/- on the payroll. The difference amount of the increment can be given to you one time or twice a year as Gratia or incentive. This method will not attract ESIC if paid once, quarterly, or half-yearly. I think the company will not have any problem doing that, and both purposes will be solved.

Regards,

Nilesh V. Soni
9869477332