shine mangalore (advocate) 26 December 2011

Applicability of esi

My client hospital is in Tamil Nadu and they have 1000 employees.They are not paying the ESI and they are telling that as they have mediclaim for their employees they need not pay ESI.

Is it correct not to pay ESI in hospital?

Please let me know what are the exemptions or how exemptions can be claimed?

THanking you in advance.

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5 Replies

sandeep gangwar (AUDITOR) 26 December 2011

Coverage under the ESI Act,1948

APPLICABILITY

Under Section 2(12) the Act is applicable to non-seasonal factories employing 10 or more persons.

Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatres, road-motor transport undertakings and newspaper establishments employing 20* or more persons.

Further under section 1(5) of the Act, the Scheme has been extended to Private Medical and Educational institutions employing 20* or more persons in certain States/UTs.

*Note: 14 State Govts. / UTs have reduced the threshold limit for coverage of shops and other establishments from 20 to 10 or more persons. Remaining State Governments/UTs are in the process of reducing the same.

The existing wage limit for coverage under the Act is Rs. 15,000/- per month ( w.e.f. 01/05/2010).

AREAS COVERED
The ESI Scheme is being implemented area-wise by stages. The Scheme has already been implemented in different areas in the following States/Union Territories

STATES
All the States except Nagaland, Manipur, Tripura, Sikkim, Arunachal Pradesh and Mizoram.

Suresh Pal (Proprietor) 01 January 2012

It is wrong. ESI is applicable for them because ESI gives more benefits which Mediclaim does not give.

Regards....

Kumar Doab (FIN) 01 January 2012

Kindly look into the attachments.

Mediclaim/Group mediclaim is valid till the last day of employment only.

ESIC:

Offers a special package of full medical care to retired/disabled insured
persons for self and spouse for a nominal contribution of Rs.120/- per annum.

is applicable to dismissed employee

Employer not to dismiss or punish employee during period of sickness, etc.

Rise and get your ESIC coverage. If the employer is adamant, report the employer to ESIC.

Attached File : 994918964 esic.zip downloaded: 314 times

Manmohan Singh (Sr. Officer) 02 January 2012

Hi,

Can any body explain me the ESI calculation criteria. On which salary ESI amt would be deducted:

1. Gross salary,

2. Basic salary,

3. Net salary take home or

4. CTC.

Please tell me i am confused between all this.

Kumar Doab (FIN) 02 January 2012

Your company/employer/HR shall be happy to clarify.Pls get in touch with them.In case there are variances noted by you, visit the ESIC office located in your city.

As per Section 2(22) of ESI Act, Wages means all remuneration paid or payable in cash to an employee. This includes HRA & conveyance as well.

For ESIC you have to consider all the fixed components of your monthly salary. You should not include any variable components.

ESI is calculated on gross i.e. basic, DA, HRA, Conveyance and any other components as part of salary

Variable components like OT to be included for payment of ESI deduction but not for the eligibility clause.

Excludes washing allowance if any from the gross