|
Eligibility
Every
employee (including casual and temporary employees),
whether employed directly or through a contractor, who
is in receipt of wages up to Rs. 6,500/- per month is
entitledto be insured under the E.S.I. Act. However,
apprentices engaged under the Apprentices Act are not
entitled to the E.S.I. benefits.
Wages
Wages’
means all remuneration paid or payable in cash to an
employee including any payment for the periodof authorized
leave, strike which is not illegal, lock-out or lay-off
and other additional remuneration, if any, paid at intervals
not exceedingtwomonths, but excludes-
- employer’s
contribution to any pension, provident or E.S.I. funds,
- any
travelling allowance/ concession,
- reimbursement
of any special expenses,
- gratuitypayable
on discharge.
What
is included in wages and what is not, is important for
the purpose of calculating ESI contribution.According
to the official public claim Employers Guide to Employees’
State Insurance Act, the position is as under:
- Deemed
to be wages: Basic Pay;Dearness Allowance;;House Rent
Allowance, City Compensatory Allowance;Overtime Wages;
Payment for day of rest;Production incentive (when
paid at intervals of less than 2 months);Bonus; Night
Shift Allowance;Heat, Gas & Dust Allowance; Payment
forun substituted holidays;Meal/Food Allowance;Suspension
Allowance;Lay off Compensation; Children Education
Allowance.
- Not
to be deemed as wages:
Contribution
paid by employer to any Pension/Provident Fund or under
ESI Act; any Travelling Allowance or value of any Travelling
Allowance; any sum paid to defray special expenses entailed
by the nature of employment; Gratuity payable on discharge;Pay
in lieu of notice of retrenchment compensation; Benefits
paid under the ESI Scheme; Encashment of Leave; Payment
of Inam (gift money) which does not form part of the
terms of employment; Washing allowance for liveries;
Conveyance allowance; Production incentive.
Contributions
The
rates of contribution payable by employees and employers
are as under:-
- Employees’
Contribution 1.75 per cent of the wages
- Employers’
Contribution4.75 per cent of the wages
Employees
in receipt of an average daily wage of up to Rs. 25
are exempt from payment of contribution.
Advantages
to Employers
Employees
who come under the purview of the E.S.I. Act, 1948 derive
the following benefits from the applicability of the
Act:
- Employers
are absolved of all liability of providing medicare
facilities to employees,reimbursement of actual expenses,
lump sum grant or opting for any health insurance
policy.
- Employers
are exempted from the applicability of the:
- Maternity
Benefit Act, 1961.
- Workmen’s
Compensation Act, 1923.
|
