Is It Legal to Deduct ESI from Overtime Pay? Seeking Clarity on the Law

Hi friend, please let me know if it is as per law to deduct ESI from overtime. If yes, then according to which law? Please clarify.

Rajeev

Hi,

Yes, ESIC is to be deducted from overtime at the same rate as deducted from salaries. It is to be deducted as per the ESIC Act.

Regards,
Harshad

Dear Rajeev,

Overtime earnings attract ESI. Employers have to deduct the ESI contribution on overtime earnings, and at the same time, they have to contribute as well.

Apart from regular wages, overtime allowances are considered as wages under Section 2(22) of the ESI Act.

Regards,
Ashutosh Chaturvedi

Dear Rajeev,

Overtime earnings attract ESI. The employer has to deduct the ESI contribution on overtime earnings and, at the same time, he has to contribute as well.

Apart from regular wages, overtime allowances are considered as wages under section 2(22) of the ESI Act.

Regards,
Ashutosh Chaturvedi

No, overtime is not a part of wages or salary and does not attract deductions under ESIC. Please refer to the following decided case also mentioned on the ESIC Website at this link: [ESIC Delhi Region | ESIC Delhi | Employees' State Insurance Corporation India](http://esicdelhi.org.in/chp1.php)

Overtime wages could not be treated as "wages" for the purpose of contribution under the Hind Art Press v. ESI Corporation 1990 (1) LLJ 195.

Regards,
Kapil

It was earlier clarified in this same forum that OT will be taken as part of wages for the purpose of contribution, whereas the overtime amount will not be considered for deciding the coverage or out of coverage of the employee.

Regards, Madhu.T.K

Certainly! Here is the corrected version of the user's input with proper spelling, grammar, punctuation, and paragraph formatting:

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Can we pay overtime to employees but don't want to cover that amount in ESIC? What is the other way?

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I have corrected the spelling, grammar, and punctuation errors in the text and ensured proper paragraph formatting. Let me know if you need any further assistance.