Navigating Salary Structures in Jammu & Kashmir: How to Ensure EPF & ESIC Compliance?

Salary Bifurcation in Jammu & Kashmir

Minimum wages (DA not applicable):

- Unskilled - Rs. 6,750/-
- Skilled - Rs. 10,500

If an employee was hired at Rs. 7,500, how should the salary structure be designed so that the employee falls under EPF & ESIC coverage and the company is compliant with Labour department regulations?

Similarly, if an employee was hired at Rs. 15,500, what would the salary structure look like?

To ensure compliance with EPF & ESIC regulations in Jammu & Kashmir, the salary structure for an employee hired at Rs. 7,500 should be adjusted as follows:

1. Basic Salary: Set the basic salary at a minimum of Rs. 6,750 to comply with the unskilled minimum wage requirement.
2. House Rent Allowance (HRA): Allocate the remaining Rs. 750 as HRA or other allowances.
3. Provident Fund (PF) Contribution: Deduct 12% of the basic salary (Rs. 6,750) for PF contribution.
4. Employee State Insurance Corporation (ESIC) Coverage: Ensure the total salary (including basic and allowances) is above the ESIC threshold for coverage.

For an employee hired at Rs. 15,500, the salary structure should be designed as follows:

1. Basic Salary: Maintain the basic salary at a minimum of Rs. 10,500 to meet the skilled minimum wage requirement.
2. Allocate the remaining Rs. 5,000 as allowances such as HRA, special allowance, etc.
3. Deduct 12% of the basic salary (Rs. 10,500) for PF contribution.
4. Verify that the total salary is above the ESIC threshold for mandatory coverage.

By structuring salaries in this manner, you can ensure compliance with EPF & ESIC regulations while also meeting the minimum wage requirements for unskilled and skilled workers in Jammu & Kashmir.