ESIC Calculation Confusion: Is It Based on Gross Salary or After Leave Without Pay?

On which ESIC is calculated: gross salary or gross salary paid. Does leave without pay taken will affect my calculation.

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ESIC is always calculated on Gross Salary. If the person has LWP, then as the Gross Salary will go down, the ESIC will also go down. ESIC will not remain the same if you have Leave Without Pay.

Regards,

ESIC, EPF, PT, and IT are all deducted based on actual earnings. As and when earnings come down, deductions will also reduce accordingly.

One more thing is, the Actual Earnings should also include accruals and arrears, both paid and not paid/paid subsequently for certain applications.

ESIC is on gross salary paid before statutory deductions. So, if a person is on leave without pay, the ESIC dues go down.

What if employees go on continuous Leave Without Pay (LWP) for months due to various reasons. Some may be absent without providing a trace and then later reinstated on certain grounds. What happens with respect to Employee State Insurance (ESI)?

Thank you.

In such a case where the person is absent without pay, his ESIC is reduced, coming to zero if he is absent throughout the month.

And there is no contribution for this period. Does he eligible for ESI Benefits, without any contribution to his ESI account during this period? Maybe he will get the benefits during the 'Benefit period' by virtue of contributions paid prior to that. But when there is no contribution, will he be eligible for the corresponding 'benefit period'? How should the break be treated?

Sir, the eligibility for various benefits under the ESI Act, 1948 depends on the contribution actually paid or payable and the number of days for which such contribution is paid or payable. If an insured person has not worked and is without pay, naturally, this situation will affect their eligibility in the next benefit period.

Mr. Mehta,

This is the moot point. There are instances when an employee goes on LWP (not on medical/health grounds) other than 'partial or permanent' disablement. For example, study leave, absenteeism, and so on. Obviously, no work means no pay and no contribution to ESI, which renders him ineligible for ESI benefits for the corresponding benefit period. Is there any way out to address this situation?

As far as I understand, ESIS is a contributory scheme. If there is no contribution within the contribution period range, naturally, during its corresponding benefit periods, the eligibility will be NIL. The circumstances of study leaves, absenteeism, etc., are not recognized to continue the eligibility of any insured person. However, there are long-term diseases like TB, etc. (ESB cases) for which a long duration of benefit periods is allowed, but in such cases, the contributory conditions are also very high.