ESI Eligibility: Do We Need to Register if 17 Employees Earn Below 21,000?

I would like to know what will be the ESI eligibility on the wage ceiling of 21,000. i.e., we have 40 employees in our company out of which 17 employees' gross salary is below 21,000. So, are we liable to register with ESIC?

Shruti.P HRD

At present, the threshold limit is ₹15,000/-. As mentioned by you, there are 40 employees, so the Employees' State Insurance Corporation (ESIC) Act is applicable to the establishment. If any employee earns below ₹15,000/-, then you have to maintain the formalities and pay the ESIC contribution for those employees. Employees earning over ₹15,000 are exempt from contributions but are included in the manpower for the implementation of the ESIC Act.

Yes, you're right. It doesn't matter how much your employees' salary is; you need to register if:

Eligibility Under Section 2(12) of the Act

Under Section 2(12) of the Act, it is applicable to non-seasonal factories employing 10 or more persons.

Eligibility Under Section 1(5) of the Act

Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas, including preview theatres, road-motor transport undertakings, and newspaper establishments employing 20 or more persons.

Furthermore, under Section 1(5) of the Act, the Scheme has been extended to Private Medical and Educational institutions employing 20 or more persons in certain States/UTs.

Please read further for all frequently asked questions about ESI: https://biblehr.com/esic-frequently-asked-questions/

On a side note, the ESI new wage limit of Rs 21,000/- is under consultation. You need to wait until the final approval.

Hello Shruti,

Yes, the threshold limit has now been increased to 21,000 from the previous 15,000 threshold. When you mention that some of them fall under the "21,000 category," you need to go for ESI. I strongly suggest checking with your company auditor before taking any steps. By the way, you might be aware that the ESI change will be effective from October 1, 2016.

Thanks.

Hello,

As per my knowledge, when any employer engages 10 or more employees in their organization, the employer will be liable for coverage under ESI. This applies to any employee who joins within the ESI limit. Therefore, even if 39 employees are not under the ESI, if one employee falls under the ESI coverage, the employer must comply with all statutory requirements under the ESIC Act, 1961.

Thanks,

Sukh Dev Singh