This query is : Resolved 

Querist : Anonymous (Querist) 27 September 2013

Is ESI of an employee to be deducted under ESI ACT 1948, if he gets wages as 1800 p.m.?

@VaibhavJ (Expert)
28 September 2013


Is it monthly salary?


C A S.S.Agarwal, M.Com.,LL.B, (Expert)
07 October 2013

The central government has revised the Employee State Insurance applicability norms for employees.
Effective 1 May 2010, units which are under ESIC coverage will have to start making ESI contributions for all employees whose gross monthly wages are Rs. 15,000 or below. Earlier ESI contributions for entities under coverage was mandatory for only those employees whose monthly gross wages were Rs. 10,000 or below.
The amended notification was released by the ministry of labour and employment on 28 April 2010. This is a positive step that will benefit thousands of employees who will now have access to various benefits provided by the Employee State Insurance Corporation (subject to conditions):
Medical Benefits
Sickness Benefits
Maternity Benefits
Disablement Benefit
Dependants’ Benefits
Funeral Expenses
In addition, the scheme also provides some other need based benefits (subject to conditions) to insured workers such as:
Rehabilitation allowance Vocational Rehabilitation Unemployment Allowance (Under Rajiv Gandhi Shramik Kalyan Yojana)
This notification will however lead to higher costs for employers as they will need to bear 4.75% of Gross Wages for the additional employees who will come under coverage, as employer contribution towards overall ESI contributions.
(Employee contribution is 1.75% of Gross Wages.)

Querist : Anonymous (Querist) 08 October 2013

hello sir thanx for the reply but the query is not yet resolved, whether ESI of the above mentioned employee is to be deducted or not?

@VaibhavJ (Expert)
08 October 2013


Yes to be deducted!


Querist : Anonymous (Querist) 09 October 2013

thax @ Mr. Vaibhav but as per Sec 42 of ESI ACT 1948 it should not be deducted.

@VaibhavJ (Expert)
09 October 2013

Thanks for Info!!

As per S/42 - No employee’s contribution
shall be payable by or on behalf of an employee whose average daily wages during a wage period are below such wages as may be prescribed by the Central Government.

Since you have not given facts of the same same can not be commented.

Further if you pay less than Minimum Wage then it is also non compliance.


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