Seeking Clarity on ESIC, PF, Bonus, and Gratuity Rules: Can You Help?

Clarification on New Employment Rules

I am requesting clarification on the new rules regarding the following points:

1. If an employee joins the company and is covered by ESIC, and on the same day, they are injured in an accident, are they eligible for ESIC benefits? Please provide full details.

2. Please update me on the new bonus act. What is the minimum payable amount based on the minimum salary, and also confirm the applicable bracket for payment, whether it is Basic+VDA or Gross pay.

3. Kindly update me on the gratuity act. What is the maximum payable amount, is it based on the Gross rate, and also specify the time period for payment (Month, year & days).

4. Concerning employee contributions to ESIC & PF:
- If the ESIC contribution is 175.02, will it be rounded up to 176/-?
- If the PF contribution is 261.02, will it be rounded up to 261.50?

Thank you in advance.

Regards,
Dinesh Kumar

ESIC Coverage from Day One
Yes, from day one, he is covered.

Bonus Act Details
There is no minimum payable; the salary limit is Rs. 10,000 per month, but the bonus will only be paid for Rs. 3,500. The bonus is calculated based on Basic + Dearness Allowance.

Gratuity Act Requirements
According to the Gratuity Act, a minimum of five years of service is required, and the maximum gratuity payable is Rs. 10 lakhs. Gratuity should be calculated based on Basic + DA.

Rounding Off for EPF and ESI Contributions
For EPF, round off to the next rupee if the fraction is greater than 50 paise; if less than 50 paise, calculate as zero. For ESI, round off to the next rupee if the amount is 50.01 or more; for ESI contributions below 50.01, calculate as Rs. 51.

Hi Deinesh,

If ESIC contribution is 175.02, it will be converted to Rs. 176/-. For EPF Contribution of Rs. 261.02, it will be converted to Rs. 261.50.

He is entitled to avail of ESIC benefits right from day one onwards. However, the employer should establish some documentary evidence such as the employee's signature in the ESIC Declaration Form, joining report, attendance marking, etc., at the time of inspection.

Bonus Entitlement

The current wage ceiling for a bonus is Rs. 21,000 per month (Basic + DA) for entitlement to payment of a bonus as per the Act. The calculation criteria for wages are Rs. 7,000 per month or the Minimum Wages prescribed in the schedule of employment, whichever is higher.

Gratuity Entitlement

Gratuity entitlement is 4 years and 240 days of continuous completed service in an establishment. The maximum payable amount is Rs. 10 Lakhs. Gratuity shall be calculated based on the components of salary of Basic + DA only.

Regards,