Can Employees Still Join ESIC if Their Wage Exceeds 21,000? Let's Discuss Contribution Rates

Hi all,

Is it possible for an employee to be a member of ESIC if his/her wage is above 21,000? If so, what will be the rate of contribution?

Hi Bino,

The person whose wage is under $21,000 or $21,000 comes under the ESIC. The person who earns a wage above $21,000 is not covered under the ESIC.

Thank you.

Dear Amitkumarprajapati,

Thank you for your reply. Just to confirm once again, is there any option for an employee to enroll in ESIC if their wage exceeds 21000?

Other than hiking the wage ceiling to Rs. 21,000, the ESIC board also allowed employees to continue as members even after their wages cross the Rs. 21,000 threshold. Employees have the option of maintaining membership of ESI after crossing the wage ceiling. However, this is optional. When did the concerned employee cross the ESI wage ceiling? Is it from April 1, 2017?

1. Sir, as far as I understand, coverage under the ESI Act, 1948 is compulsory and restricted only up to the coverage wage limit (Rs. 21,000/- as at present). I have not come across any amendment indicating that the same has been made optional for employees earning wages exceeding the coverable limit.

2. I hope that the learned member, Sri Nath Sai Ram ji, will provide and upload a copy of such notification for our guidance and updating, if possible.

Srinath ji, the concerned employee was a member in ESI till 2009. Now her salary exceeds Rs. 21,000. Is she able to enroll again in ESIC? Actually, I read in a newspaper that an employee can be a member in ESIC, even though his/her salary exceeds the limit. Hence, I have this query.

Mr. Binoy, you are right about the newspaper report and ESI press release to that effect. However, the employee in question, who has been out of ESI coverage from 2009 to date, cannot exercise this voluntary option. This option is applicable for those already covered under ESI or who have come into ESI coverage from 01/01/2017, following the increase in the wage ceiling to Rs 21,000. The employer has no role in this. Employees concerned (who go out of the threshold of Rs 21,000 from 01/04/2017) have to approach their respective ESI local office to learn about the modalities.

There was a proposal to enhance the ESI ceiling to Rs. 21,000, allowing employees earning more than Rs. 21,000 per month to opt for ESI Coverage. However, in the amended ESI Act of 2017, this provision was not taken into consideration, and the coverage salary limit was set at and inclusive of Rs. 21,000.

Suresh

Sir, in the year 2017, there is no amendment in the ESI Act of 1948. The last amendment in the said Act was made in the year 2010. However, through recent amendments, changes have been made in the ESI (Central) Rules of 1950, whereby the wage ceiling has been enhanced to Rs. 21,000 per month.

What if I am eligible for ESI before (salary: 15000) and I got a raise to 23000, but now my salary is 20000. Will the ESI coverage start again for me?

Thank you.

Dear Sirs,

I have the same question as earlier. Many of my employees were given increments in July and December, and their wages were above the ESIC limit. However, as per my consultant, it is mandatory to contribute for the duration of April to September and October to March. So, is it mandatory to contribute, or can I stop the contribution of employees whose salary is above 21,000?

Thank you.

Dear Friend, congratulations to your Consultant.

Please note that an ESI Covered Employee during the Contribution Period: April to Sep/Oct to March will continue to be an ESI Member till the completion of the respective Contribution period, despite crossing the ESI Wage Ceiling during the Contribution Period.

Henceforth, please follow the practice of giving increments to ESI Covered Employees either from 1st April or 1st October.

Dear All,

If any employee's gross salary exceeds ₹21,000 in the middle of the contribution period, is it mandatory to pay contributions until the end of the period? Please share with me the relevant clause and section.

Thank you.

Dear member, such employees will continue to be covered, and contributions will be payable under the ESI Act, 1948 until the close of the contribution period. Please refer to the proviso to section 2(9) of the said Act.

If a woman is receiving a salary of Rs. 20,000 until December 2016, she is not covered under ESI. However, we need to cover her under ESI after January 2017 as the ceiling has been increased to Rs. 21,000. In this case, will she be able to avail of the maternity benefit under the ESIC Act?

If an employee's gross salary exceeds Rs. 21,000 and becomes Rs. 22,000 in the middle of the contribution period, will their ESIC contributions be based on Rs. 21,000 or Rs. 22,000 until the completion of the contribution period?

Dear member, contributions will be payable on the total wages of Rs. 22,000 until the close of the present contribution period.

Thank you.

My ESIC contribution stopped due to a salary hike of less than Rs. 21,000. Is there any option to continue the same?

Dear member,

The provisions of the ESI Act, 1948 are compulsory in nature, and hence there are no options.

Hi to All,

Greetings!!

Will be glad to have suggestions on the following:

One employee is getting ₹20,000 per month up to 31.03.2019, and his salary is increased to ₹22,500 w.e.f. 01.04.2019. It is implemented w.e.f. 01.06.2019, and he has already paid the ESIC contribution for the months of Apr-19 & May-19.

1. At what rate should the employee/employer pay the ESIC Contribution? Is it @ ₹21,000 or @ ₹22,500?

2. Will the employee continue to pay the contribution up to Sept-19 or stop it after Jun-19?

Thanks & Regards,
Acharya

Dear All,

One of my employees earns 18000/- per month, but when he does overtime, his gross salary increases to 22000 to 25000/- per month. Can anyone suggest to me if his ESIC deposit is applicable in this case?

Eligibility for ESI Deduction

My question is, one of our employees had a salary of 21,000 in June 2021, and now his salary is 25,000. Is he eligible for ESI deduction? If yes, will ESI be deducted on 21,000 or 25,000? If there is any notification regarding this topic, please share.