Wage limit under ESIC - Finance Ppl

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Wage limit under ESIC

What is wage ceiling

The maximum earning threshold, which is also known as monthly wage ceiling limit, is what that decides the eligibility of individuals employed in a company, to various labour beneficiary programs.

Wage limit:

The wage limit under Employees’ State Insurance for an employee to get covered/ eligible for benefits under the Act is Rs.21000 per month. Rs.25000 p.m in case of Persons with Disability).

Exclusions and Inclusions to wages

For the purpose of the calculation of the ceiling, Sec.2(22) mentions what constitutes the part of term wages. Wages refer to the amount paid or payable in cash/account deposit to an employee that includes:

  1. Basic salary
  2. Paid HRA Allowance (not notional allowance)
  3. Overtime allowance paid
  4. Paid Education allowance
  5. Conveyance allowance (subject to certain conditions)
  6. Wages and Dearness Allowance for Unsubstituted Holidays
  7. Wages Paid During Layoff period
  8. Interim relief ( normally paid when wage or DA is under revision and delayed due to any reason)
  9. Exgratia payments, if it is made within an interval/duration of two months.
  10. Wages paid for Duties performed by employees on gazetted holidays.
  11. Permissible subsistence/suspension allowance
  12. Night shift allowance
  13. Medical allowance (payments made by the employer in lieu of the medical benefit)
  14. Newspaper Allowance
  15. Attendance Bonus,(allowed by certain employers discourage the workers from absenting from the job)
Exclusions:
  1. Annual bonus (as the periodicity of payment is more than 2 months)
  2. Incentive or production bonus paid at an interval exceeding 2 months.
  3. Sum paid or payable as travelling allowance
  4. Any sum paid to the person employed to reimburse the special expenses incurred on him by the nature of his employment; or
  5. Any gratuity payable on discharge
  6. Payment made on account of Leave encashment
  7. Any contribution paid by the employer to any pension fund or provident fund under the Act
  8. Amount collected by employers from the customers as service charge and remitted to employees are not part of wages

    9. Last revised: Last revision in the wage limit made took effect from 1st Jan 2017