All of you are aware that the Government of India has enhanced the wage ceiling for coverage of an employee under the ESI Act from Rs. 15,000 to Rs. 21,000 with effect from 1st October 2016. Can anybody provide me with the wage definition under the ESI Act?
Acknowledge(2)
Amend(0)
2Acknowledge(2)Amend(0)
Definition of Wages Under the ESI Act
The term "wages" has been defined under section 2(22) of the Act in three parts as follows:
1. All remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, are fulfilled.
2. Includes any payment to an employee in respect of any period of authorized leave, lock-out, strike which is not illegal, or lay-off.
3. Other additional remuneration, if any, paid at intervals not exceeding two months.
However, it does not include:
a. Any contribution paid by the employer to any pension fund or provident fund or under the ESI Act.
b. Any traveling allowance or the value of any traveling concession.
c. Any sum paid to the person employed to defray the special expenses entitled to him by the nature of his employment.
d. Any gratuity payable on discharge.
In order to ascertain whether the expenditure incurred by the employers comes under section 2(22) of the ESI Act:
Wages Include:
a) Suspension Allowance/Subsistence Allowance is considered wages.
b) Overtime allowance is wages for payment of contribution only but not for the determination of employee under section 2(9) of the Act.
c) Inam is wages when it is paid for special skill or higher responsibilities or where the employer has no right to withdraw or revise it.
d) 'Lay Off' pay is wages.
e) House Rent Allowance is wages.
f) Night Shift/Heat/Gas/Dust Allowance is wages.
g) 'Conveyance Allowance' is wages, which arises out of the contract of employment from 1.4.02 as per Hqrs. letter dated 21.3.02.
h) Medical Allowance is wages when it is not reimbursed.
i) Newspaper Allowance is wages when it is not reimbursed.
j) Education Allowance is wages when it is not reimbursed.
k) 'Drivers Allowance' is wages.
l) Food, Meal, Tiffin, and Lunch allowance is wages when it arises out of a contractual agreement.
m) 'Gazetted Allowance' is wages.
n) 'Wages' and Dearness Allowance for un-substituted holidays is wages.
o) Interim Relief is wages.
p) Attendance Bonus is wages provided the periodicity is not more than two months.
q) Hamalies or collies at a particular time in the premises of the employer are 'employees' and contribution is payable.
r) Short period contract for service – electricians, carpenters, plumbers, repair work if the work is done within the factory premises, contribution is payable in respect of employees.
s) The following items may be considered as 'Wages': (1) Matinee allowance paid to the cinema employee (2) Shift allowance (3) Location allowance paid in addition to D.A. to meet the high house rent (4) Compensatory allowance (5) Cash handling allowance paid to Cashier (6) Supervisory allowance (7) Additional pay paid to training staff (8) Charge allowance (9) Steno/typist allowance (10) Plant allowance (11) Computer allowance (12) Gestetner/Photo copies/printers allowance (13) Personal/special allowance (14) Machine allowance (15) Canvassing allowance (16) First aid allowance (17) Personal allowance for skill, efficiency, or past good records (18) Area allowance for high cost living (19) Ex-gratia payment if payment is made within an interval of two months (20) Conveyance all w.e.f. 01.04.02 (21) Food/Tiffin/Meal all w.e.f. 06.05.03.
Coverage of workers engaged by outside agencies/job contractors in connection with the work of the principal employer outside the premises. For the purpose of verification and inspection, the details in respect of these employers/employees should be furnished by the Principal Employer in the proforma prescribed in Annexure-I.
From India, Bangalore
Acknowledge(7)
Amend(0)
The term "wages" has been defined under section 2(22) of the Act in three parts as follows:
1. All remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, are fulfilled.
2. Includes any payment to an employee in respect of any period of authorized leave, lock-out, strike which is not illegal, or lay-off.
3. Other additional remuneration, if any, paid at intervals not exceeding two months.
However, it does not include:
a. Any contribution paid by the employer to any pension fund or provident fund or under the ESI Act.
b. Any traveling allowance or the value of any traveling concession.
c. Any sum paid to the person employed to defray the special expenses entitled to him by the nature of his employment.
d. Any gratuity payable on discharge.
In order to ascertain whether the expenditure incurred by the employers comes under section 2(22) of the ESI Act:
Wages Include:
a) Suspension Allowance/Subsistence Allowance is considered wages.
b) Overtime allowance is wages for payment of contribution only but not for the determination of employee under section 2(9) of the Act.
c) Inam is wages when it is paid for special skill or higher responsibilities or where the employer has no right to withdraw or revise it.
d) 'Lay Off' pay is wages.
e) House Rent Allowance is wages.
f) Night Shift/Heat/Gas/Dust Allowance is wages.
g) 'Conveyance Allowance' is wages, which arises out of the contract of employment from 1.4.02 as per Hqrs. letter dated 21.3.02.
h) Medical Allowance is wages when it is not reimbursed.
i) Newspaper Allowance is wages when it is not reimbursed.
j) Education Allowance is wages when it is not reimbursed.
k) 'Drivers Allowance' is wages.
l) Food, Meal, Tiffin, and Lunch allowance is wages when it arises out of a contractual agreement.
m) 'Gazetted Allowance' is wages.
n) 'Wages' and Dearness Allowance for un-substituted holidays is wages.
o) Interim Relief is wages.
p) Attendance Bonus is wages provided the periodicity is not more than two months.
q) Hamalies or collies at a particular time in the premises of the employer are 'employees' and contribution is payable.
r) Short period contract for service – electricians, carpenters, plumbers, repair work if the work is done within the factory premises, contribution is payable in respect of employees.
s) The following items may be considered as 'Wages': (1) Matinee allowance paid to the cinema employee (2) Shift allowance (3) Location allowance paid in addition to D.A. to meet the high house rent (4) Compensatory allowance (5) Cash handling allowance paid to Cashier (6) Supervisory allowance (7) Additional pay paid to training staff (8) Charge allowance (9) Steno/typist allowance (10) Plant allowance (11) Computer allowance (12) Gestetner/Photo copies/printers allowance (13) Personal/special allowance (14) Machine allowance (15) Canvassing allowance (16) First aid allowance (17) Personal allowance for skill, efficiency, or past good records (18) Area allowance for high cost living (19) Ex-gratia payment if payment is made within an interval of two months (20) Conveyance all w.e.f. 01.04.02 (21) Food/Tiffin/Meal all w.e.f. 06.05.03.
Coverage of workers engaged by outside agencies/job contractors in connection with the work of the principal employer outside the premises. For the purpose of verification and inspection, the details in respect of these employers/employees should be furnished by the Principal Employer in the proforma prescribed in Annexure-I.
From India, Bangalore
Acknowledge(7)+2 more
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.
Draft Notification dt 6-10-2016 reg enhancement of wage ceiling under ESI Act.pdf