ESI Deductions After Salary Increments: How Should We Inform Our Employees?

Dear HR professionals,

Our employees have received increments, and now they are no longer eligible for ESI. However, the ESI amount is still being deducted from them as their names have not been removed from the government list. One of our employees has raised a question as to why we are not informing them of this change. I kindly request anyone to please review this situation.

Hi,

ESI Contribution Period

The ESI contribution period is as follows:

1st April to 30th September
1st October to 31st March of the next year.

After the commencement of a contribution period, even if the gross salary of an employee exceeds Rs. 21,000 monthly, the employee continues to be covered under the ESI scheme until the end of that contribution period. The contribution is deducted from the new salary even if it is above Rs. 21,000/-. Therefore, ESI will be deducted until the end of the contribution period regardless of any salary increase.

If you are the HR of the organization, you may explain this to the employees as mentioned above.

By the way, what do you mean by the government list?

Sorry! That was a verbal mistake. I meant to ask about the ESI list. Thank you. Mam, do we need to mail this to the employees?