Dear All,
Please let me know the following details regarding ESI for non-skilled laborers in Tamil Nadu:
1. Is ESI mandatory if the gross income is less than Rs. 10,000?
2. If it is mandatory, what is the percentage?
3. Is it calculated based on gross income or basic salary?
Thank you.
From India
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4Please let me know the following details regarding ESI for non-skilled laborers in Tamil Nadu:
1. Is ESI mandatory if the gross income is less than Rs. 10,000?
2. If it is mandatory, what is the percentage?
3. Is it calculated based on gross income or basic salary?
Thank you.
From India
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Hello Padmapriya
1)ESI is mandatory when an employees gross salary is less than Rs 10,000.
2)1.75%wil be the employees cont and 4.75 % wil be employers contribution on employers salary.
3) The following are deemed as wages.
• Basic pay
• Dearness allowance
• House rent allowance
• City compensatory allowance
• Overtime wages (but not to be taken into account for determining the coverage of an employee)
• Payment for day of rest
• Production incentive
• Bonus other than statutory bonus
• Night shift allowance
• Heat, Gas & Dust allowance
• Payment for unsubstituted holidays
• Meal/food allowance
• Suspension allowance
• Lay off compensation
• Children education allowance (not being reimbursement for actual tuition fee).
NOT to be deemed as wages
• Contribution paid by kthe employer to any pension/provident fund or under ESI Act.
• Sum paid to defray special expenses entailed by the nature of employment – Daily allowance paid for the period spent on tour.
• Gratuity payable on discharge.
• Pay in lieu of notice of retrenchment compensation
• Benefits paid under the ESI Scheme.
• Encashment of leave
• Payment of Inam which does not form part of the terms of employment.
• Washing allowance for livery
• Conveyance Amount towards reimbursement for duty related journey
For more queries please revert me.
Thanks
Manikandan.M
09939185120
From India, Ranchi
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1)ESI is mandatory when an employees gross salary is less than Rs 10,000.
2)1.75%wil be the employees cont and 4.75 % wil be employers contribution on employers salary.
3) The following are deemed as wages.
• Basic pay
• Dearness allowance
• House rent allowance
• City compensatory allowance
• Overtime wages (but not to be taken into account for determining the coverage of an employee)
• Payment for day of rest
• Production incentive
• Bonus other than statutory bonus
• Night shift allowance
• Heat, Gas & Dust allowance
• Payment for unsubstituted holidays
• Meal/food allowance
• Suspension allowance
• Lay off compensation
• Children education allowance (not being reimbursement for actual tuition fee).
NOT to be deemed as wages
• Contribution paid by kthe employer to any pension/provident fund or under ESI Act.
• Sum paid to defray special expenses entailed by the nature of employment – Daily allowance paid for the period spent on tour.
• Gratuity payable on discharge.
• Pay in lieu of notice of retrenchment compensation
• Benefits paid under the ESI Scheme.
• Encashment of leave
• Payment of Inam which does not form part of the terms of employment.
• Washing allowance for livery
• Conveyance Amount towards reimbursement for duty related journey
For more queries please revert me.
Thanks
Manikandan.M
09939185120
From India, Ranchi
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dear Ms. priya Yes ESI is mandotory for employee drawing below 10,000 even 10000 it is not calculated in basic salary and it mentioned clearly in another reply all the best
From India, Madras
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From India, Madras
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Hello Priya,
I broadly agree with the two replies on the subject. Under the ESI Act, there is no difference between skilled and unskilled, casual or regular, etc. All employees, employed even for a single day, and whatever nomenclature and status given to him are to be covered if remuneration paid in cash is Rs 10,000 or below (excluding OT, which is to be taken only for paying contribution, and not for deciding coverage). All payments paid in cash are to be considered, but anything paid in kind need not be taken. As for HR allowance, if payment of rent is made by the Company directly to the house owner, though taken for an employee, need not be taken. Similarly, reimbursement of actual conveyance or transportation expenses need not be taken. Further production and productivity incentives and such payments made in a periodicity of more than two months need not be taken to pay contribution.
Please also remember, the benefits available to an employee covered under the ESI scheme, in cash (for leave, maternity, accident-related disability, etc.), will also be based on the wage on which the contribution is paid, and since benefit rates have been revised upward, your employee will stand to benefit depending on the actual rate of contribution paid. However, for medical care, the rate of contribution paid will not make any difference since all are treated equally for medical care.
Instead of bothering about the nomenclature of different components of gross wage, just remember "anything paid in cash in consideration of a contract for employment is wage, anything paid in kind or paid additional to contractual obligation in a periodicity of over two months is not wage, and reimbursement of specific purposes like washing allowance and actual conveyance is not wage".
The ESI Corporation Headquarters in Delhi has been issuing specific instructions on the subject based on court judgments. Often, the field officers and Inspectors may not be aware of the instructions and policy stand of their department, and will seek contribution on wages not legally correct. Please use the Right to Information Act to seek copies of policy instructions from ESIC HQ New Delhi.
O. Abdul Hameed
Formerly Additional Commissioner ESIC
oahamid@yahoo.com
From India, Coimbatore
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I broadly agree with the two replies on the subject. Under the ESI Act, there is no difference between skilled and unskilled, casual or regular, etc. All employees, employed even for a single day, and whatever nomenclature and status given to him are to be covered if remuneration paid in cash is Rs 10,000 or below (excluding OT, which is to be taken only for paying contribution, and not for deciding coverage). All payments paid in cash are to be considered, but anything paid in kind need not be taken. As for HR allowance, if payment of rent is made by the Company directly to the house owner, though taken for an employee, need not be taken. Similarly, reimbursement of actual conveyance or transportation expenses need not be taken. Further production and productivity incentives and such payments made in a periodicity of more than two months need not be taken to pay contribution.
Please also remember, the benefits available to an employee covered under the ESI scheme, in cash (for leave, maternity, accident-related disability, etc.), will also be based on the wage on which the contribution is paid, and since benefit rates have been revised upward, your employee will stand to benefit depending on the actual rate of contribution paid. However, for medical care, the rate of contribution paid will not make any difference since all are treated equally for medical care.
Instead of bothering about the nomenclature of different components of gross wage, just remember "anything paid in cash in consideration of a contract for employment is wage, anything paid in kind or paid additional to contractual obligation in a periodicity of over two months is not wage, and reimbursement of specific purposes like washing allowance and actual conveyance is not wage".
The ESI Corporation Headquarters in Delhi has been issuing specific instructions on the subject based on court judgments. Often, the field officers and Inspectors may not be aware of the instructions and policy stand of their department, and will seek contribution on wages not legally correct. Please use the Right to Information Act to seek copies of policy instructions from ESIC HQ New Delhi.
O. Abdul Hameed
Formerly Additional Commissioner ESIC
oahamid@yahoo.com
From India, Coimbatore
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My details:
Name: Saravanan
Emp. ID No: 2141
DOJ: 26 July 2007
Date of Retirement: 31 Aug 2008
Name of Company: Amnet Systems Pvt Ltd, Vellore 632 006, Tamil Nadu
Head of Company: Amnet Systems Pvt Ltd, Chennai-18
PF No: TN/49889/982
ESI No: 51-77319-66
Designation: Team Member
Department: E-resource
Total Contribution of ESI/PF: July 2007 to August 2008
Total ESI Amount: Rs. 438.15 paise
Total PF Amount: Rs. 717.24 paise
Not received: Rs. 1155.39 paise
What should I do next?
How can I retrieve these returns?
Who are the contacts for these purposes? Address?
Can someone guide me?
Awaiting your response.
Goodbye,
Saravanan
Vellore
Oct 30, 2008
From India, Madras
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Name: Saravanan
Emp. ID No: 2141
DOJ: 26 July 2007
Date of Retirement: 31 Aug 2008
Name of Company: Amnet Systems Pvt Ltd, Vellore 632 006, Tamil Nadu
Head of Company: Amnet Systems Pvt Ltd, Chennai-18
PF No: TN/49889/982
ESI No: 51-77319-66
Designation: Team Member
Department: E-resource
Total Contribution of ESI/PF: July 2007 to August 2008
Total ESI Amount: Rs. 438.15 paise
Total PF Amount: Rs. 717.24 paise
Not received: Rs. 1155.39 paise
What should I do next?
How can I retrieve these returns?
Who are the contacts for these purposes? Address?
Can someone guide me?
Awaiting your response.
Goodbye,
Saravanan
Vellore
Oct 30, 2008
From India, Madras
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Dear Ramesh,
In my opinion, the meal vouchers should also be part of the salary, simply put, it can be treated as 'meal allowance.' Hence, the above employee can be treated as a non-coverable employee.
From India, Hyderabad
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In my opinion, the meal vouchers should also be part of the salary, simply put, it can be treated as 'meal allowance.' Hence, the above employee can be treated as a non-coverable employee.
From India, Hyderabad
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Dear V.S.P. gaaru, kindly refer to the post of Mr. Hamid replying to a query raised by Priya. Here in the 3rd paragraph, he has said:
"Anything paid in cash in consideration of a contract for employment is wage, anything paid in kind or paid additionally to contractual obligation in periodicity of over two months is not wage, and reimbursement of a specific purpose like washing allowance and actual conveyance is not wage."
This means anything paid in kind cannot be treated as wages since Sodexo vouchers cannot be encashed. They can only be used to buy food. Therefore, it can be concluded that it does not form "wages". So, this derivation, which also seems to hold good, does confuse me. What is your opinion?
From India, Madras
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"Anything paid in cash in consideration of a contract for employment is wage, anything paid in kind or paid additionally to contractual obligation in periodicity of over two months is not wage, and reimbursement of a specific purpose like washing allowance and actual conveyance is not wage."
This means anything paid in kind cannot be treated as wages since Sodexo vouchers cannot be encashed. They can only be used to buy food. Therefore, it can be concluded that it does not form "wages". So, this derivation, which also seems to hold good, does confuse me. What is your opinion?
From India, Madras
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Dear Ramesh,
As you said, if the employer is clearly providing in kind and as the vouchers cannot be treated as 'paid in cash,' I too can agree with your version. I can agree with your version 100% if and only if the employer has to establish, as per their records, that:
i) this was payment other than what was agreed upon;
ii) as a token of goodwill;
iii) the vouchers cannot be converted into cash in any way.
Thank you for the insightful discussion.
Best regards, [Your Name]
From India, Hyderabad
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As you said, if the employer is clearly providing in kind and as the vouchers cannot be treated as 'paid in cash,' I too can agree with your version. I can agree with your version 100% if and only if the employer has to establish, as per their records, that:
i) this was payment other than what was agreed upon;
ii) as a token of goodwill;
iii) the vouchers cannot be converted into cash in any way.
Thank you for the insightful discussion.
Best regards, [Your Name]
From India, Hyderabad
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