Washing Allowance - First its nature of payment is to be decided - and how it is paid - every month along with wages following an agreement or contract of service - depending upon its nature of payment the coverage of the employee will be determined. If it is not a conditional payment / could not be withdrawn at time by the employer, or otherwise paid regularly as stated, it should be part of the wages as defined under the ESI Act and coverage of the employee will accordingly be decided - he be out of coverage of the ESI Act since his salary will be above the wage limit of 15,000/- a month inclusive of washing allowance being a part of payable wages. This should be ratified by the Appropriate ESI authority. This what I feel, should be your stand.