How to Communicate ESIC Changes to Blue-Collar Employees Without Causing Alarm

Dear Expert, The Employees' State Insurance Corporation (ESIC) has raised the monthly wage threshold to Rs 21,000, from the current Rs 15,000, effective 1 October 2016. I need an email format to inform about the above changes and their impact on CTC in a constructive way. We are dealing with blue-collar employees, and I know they will not appreciate more deductions in their salaries. Employees whose salary is between Rs 15,001 and Rs 21,001 will now be covered under the ESIC Act. Can you please help me with this draft? I have created a draft, but I am unsure of the impact it will have.

Draft:

Dear All, Greetings for the day! The Employees' State Insurance Corporation (ESIC) has raised the monthly wage threshold to Rs 21,000, from the current Rs 15,000, for coverage under its health insurance scheme effective 1 October 2016.

As per the new amendment, employees drawing a monthly gross salary below Rs. 21,001 will now be covered under ESIC, and a deduction of 1.75% of the gross salary will be applicable. The company will contribute 4.75% of the gross salary towards ESIC.

Illustration:

Sr. No | Gross Monthly Salary | Deduction prior to 1 Oct 2016 | Company Contribution | Gross Monthly Salary | Deduction from Employee salary | Company Contribution

1 | 12060 | 211 | 573 | 12060 | 211 | 573

2 | 15025 | NA | NA | 15025 | 263 | 714

3 | 21000 | NA | NA | 21000 | 368 | 998

4 | 22000 | NA | NA | 22000 | NA | NA

Thank you.

Ensure Proper Paragraph Formatting: - Adjusted the paragraph breaks for better readability and clarity.

Fixed Spelling and Grammar Errors: - Corrected spelling errors in the text.

Preserved Meaning: - Maintained the original meaning and tone of the message.

Regards

Effective Strategies for ESI Implementation

First of all, keep in mind that there is no official notification released till now. The effective way I followed in my company is:

1. Educate or conduct bulk training sessions about the importance of ESI, its benefits, and a comparison of ESI with other private medical insurances. I educated the same to Non-ESI employees as knowledge sharing.

2. Assist employees in obtaining benefits from ESI.

3. Contact ESI to conduct a camp in your office. (If the employee strength is more than 50, they will come). They can also conduct a session for your employees to explain the benefits of ESI.

4. Try to convince them that it is beneficial for them. Highlighting the employer contribution won't help to convince them.

After these steps, many Non-ESI employees have expressed their willingness to join ESI. Now, this latest news will bring them joy. (Of course, there will be some employees who won't like it, as they never use ESI or other medical insurances).

Now, before sending an official mail, provide informal information to those employees earning between Rs. 15,001 and Rs. 21,000 about the news and convince them that they have no other option and it is going to be followed in all companies. This may help avoid attrition and resistance.

Regards

Hi Hetal,

Thank you for your appreciation. Please don't mind about the company, as they will show these extra expenditures as Statutory expenses on their balance sheet and reduce their tax payable. Employers don't have any option but to pay the contribution. Small companies can modify their salary structure by adding components like Washing allowances, which are exempted in ESI.

Exemption from Maternity Benefit and Employee Compensation Acts

In addition, you can inform the employer that they are exempt from the Maternity Benefit Act and the Employee Compensation Act for employees covered under the ESI Act.

Maternity Leave and Salary Payment

For employees who are taking maternity leave, they can receive their salary from ESI. The employer will not pay the salary for that period.

Accident Compensation During Employment

If an employee meets with an accident during employment hours (from the time they leave home in the morning to when they return home in the evening), all expenses and compensation will be paid by ESI.

Is this upward revision from 15k to 21k applicable to Gujarat-based enterprises as well?