Dear Seniors
I am aware of the concept of contribution periods for ascertaining coverage under the ESI Act.
In our factory, we pay quite a large amount of wages as variable monthly production incentive and also pay Overtime when applicable. The fixed elements of basic, HRA, etc. total only Rs. 10,000 max. for all our employees.
In many months, the total earnings for a full month exceed the upper ceiling of Rs.15,000, often throughout the contribution period. Our consultants are telling us that, as long as the fixed elements of basic, HRA, etc. are less than Rs. 15,000, the employee is always covered under the Act, even though the total earnings, including variable production incentive and OT, exceed Rs. 15,000.
I would like your views on whether this advice is correct and, if so, any references in the Act or in court judgments which support this view.
I am sure I will get very knowledgeable advice in this forum!
Thank you in advance!
Raghav Rao
I am aware of the concept of contribution periods for ascertaining coverage under the ESI Act.
In our factory, we pay quite a large amount of wages as variable monthly production incentive and also pay Overtime when applicable. The fixed elements of basic, HRA, etc. total only Rs. 10,000 max. for all our employees.
In many months, the total earnings for a full month exceed the upper ceiling of Rs.15,000, often throughout the contribution period. Our consultants are telling us that, as long as the fixed elements of basic, HRA, etc. are less than Rs. 15,000, the employee is always covered under the Act, even though the total earnings, including variable production incentive and OT, exceed Rs. 15,000.
I would like your views on whether this advice is correct and, if so, any references in the Act or in court judgments which support this view.
I am sure I will get very knowledgeable advice in this forum!
Thank you in advance!
Raghav Rao