Dear All I would like to know can PF & ESI applicable on the overtime given to workers. Secondly how to calculate the PF & ESI for Deduction on Overtime Regards Vishal Setia
From India, Faridabad
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2From India, Faridabad
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E.S.I. on Overtime
Whether E.S.I. contributions are payable on overtime?
There have been differences of opinion among various High Courts on this point. Finally, the Supreme Court has held that overtime wages will be liable for deductions for ESI contributions. The employer is obligated to pay wages when the employee works beyond his duty hours. This will be in addition to the payment of wages an employee receives for normal work. In other words, both the remuneration received during the working hours and overtime constitute composite wages, and thereby it is a 'wage' within the meaning of section 2(22) of the Act. Whatever remuneration is paid or payable for overtime work forms wages under an implied term of the contract of employment, and the remuneration paid therefore forms part of the 'wages' under section 2(22) of the Act. The Supreme Court considered this elaborately and held that the Act is welfare legislation and the definition of wages is designedly wide.
Indian Drugs & Pharmaceuticals Ltd. etc. vs. Employees' State Insurance Corporation, 1997 LLR 1 (Supreme Court).
Overtime is not considered a wage under the PF Act (PF wage = Basic + DA only).
All the best
From India, Vijayawada
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Whether E.S.I. contributions are payable on overtime?
There have been differences of opinion among various High Courts on this point. Finally, the Supreme Court has held that overtime wages will be liable for deductions for ESI contributions. The employer is obligated to pay wages when the employee works beyond his duty hours. This will be in addition to the payment of wages an employee receives for normal work. In other words, both the remuneration received during the working hours and overtime constitute composite wages, and thereby it is a 'wage' within the meaning of section 2(22) of the Act. Whatever remuneration is paid or payable for overtime work forms wages under an implied term of the contract of employment, and the remuneration paid therefore forms part of the 'wages' under section 2(22) of the Act. The Supreme Court considered this elaborately and held that the Act is welfare legislation and the definition of wages is designedly wide.
Indian Drugs & Pharmaceuticals Ltd. etc. vs. Employees' State Insurance Corporation, 1997 LLR 1 (Supreme Court).
Overtime is not considered a wage under the PF Act (PF wage = Basic + DA only).
All the best
From India, Vijayawada
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Dear Raghunath Thanks for the clarification but 1. what about the Overtime allounces is it the part of wages under PF. 2. what is under section 7A of PF act regards Vishal Setia
From India, Faridabad
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From India, Faridabad
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Dear friends , P.F Deduction on Basic Salary & ESI on Total Gross salary . Regards, Akhilesh Shukla Officer (P&A)
From Oman
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From Oman
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
PF & ESI.zip
Presentation PF&ESI.ppt
Exp.and esi pf mis format.xls