As all of us know the maximum ceiling for claiming ESI benefit is Rs. 15000/- pm salary. You stated that this Rs. 15,000/- includes all components of the salary - Basic, DA, Conveyance, HRA, OT, etc.
Now assumean employeerecieves Rs. 15,000/- pm or less salaries for few months (say Jan to March in a year). However, his OT increases due to extra hours and he gets more than Rs. 15,000/- pm in some / one month (say Rs. 16000/- pm in April & May in a year). Will he be eligible for ESI benefit at that time when his salary has increased beyond Rs. 15,000/- in April & May ? Subsequently in June / July, is salary became Rs. 14500/- pm due to reduced OT.
How does this process work. I did not get clarity from ESI Act 1948book / bare act.
Please help.
From India, Mumbai
Now assumean employeerecieves Rs. 15,000/- pm or less salaries for few months (say Jan to March in a year). However, his OT increases due to extra hours and he gets more than Rs. 15,000/- pm in some / one month (say Rs. 16000/- pm in April & May in a year). Will he be eligible for ESI benefit at that time when his salary has increased beyond Rs. 15,000/- in April & May ? Subsequently in June / July, is salary became Rs. 14500/- pm due to reduced OT.
How does this process work. I did not get clarity from ESI Act 1948book / bare act.
Please help.
From India, Mumbai
I think you require two things to be clarified. First, if the salary of an employee increases and becomes more than the coverable limit (Rs 15000, as it is at present) then he will continue to be covered till the contribution period ends. As you know we have two contribution periods, viz, April to Sept and October to March. As such, if salary increase is taken place in May, he will continue to be under ESI till September.
Second thing is that Overtime Wages is not considered for deciding coverage of employee but the amount of OT will attract ESI contribution. Therefore, exceeding salary due to overtime wages will not have any implication with regard to coverage. For the purpose of coverage, actual salary as per agreement is taken into account but if an employee covered by ESI earns higher salary during the month due to OT wages, he has to contribute ESI for the whole amount including OT.
Regards,
Madhu.T.K
From India, Kannur
4193Second thing is that Overtime Wages is not considered for deciding coverage of employee but the amount of OT will attract ESI contribution. Therefore, exceeding salary due to overtime wages will not have any implication with regard to coverage. For the purpose of coverage, actual salary as per agreement is taken into account but if an employee covered by ESI earns higher salary during the month due to OT wages, he has to contribute ESI for the whole amount including OT.
Regards,
Madhu.T.K
From India, Kannur
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