Clarification Needed on ESI Remittance for Employee Rejoining with Increased Salary

Dear All, Need clarification regarding ESI remittance. One of our employees drawing a salary of Rs. 18,000/- left the organization on 14/02/2025 and rejoined on 03/03/2025 with management approval as a new employee with a new ID number and a salary of Rs. 23,000/-. Please suggest if the company has to pay ESI contribution for Mar-2025 as well?

If you had put "left" against the employee in the returns for the wage month of February 2025. he is deemed to be out of your organisation. Continuing remittance till the contribution period ends applies to those employees who are on your muster rolls. In this case he was exited from the rolls but has rejoined. Then no need to cover him since his salary is above Rs 21000.

In this scenario, since the employee left the organization and then rejoined with a higher salary, the company would need to pay ESI contributions for March 2025 as the salary now exceeds the ESI threshold limit. According to the ESI Act, once an employee's salary crosses the specified limit during a contribution period, ESI deductions must be made for that entire period. Therefore, for March 2025, the company should calculate and remit the ESI contributions based on the new salary of Rs. 23,000/-. It's essential to ensure compliance with ESI regulations to avoid any penalties or legal issues.