Wage ceiling 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.
In this article we shall see about wage limit for the purpose of ESIC as defined in Employees' State Insurance Act, 1948
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.
Inclusions: wages refer to the amount paid or payable in cash/account deposit to an employee that includes:
- Basic salary
- Paid HRA Allowance (not notional allowance)
- Overtime allowance paid
- Paid Education allowance
- Conveyance allowance (subject to certain T&C)
- Wages and Dearness Allowance for Unsubstituted Holidays
- Wages Paid During Layoff period
- Interim relief ( normally paid when wage or DA is under revision & delayed due to any reason)
- Exgratia payments, if it is made within an interval/duration of two months.
- Wages paid for Duties performed by employees on gazetted holidays.
- Permissible subsistence/suspension allowance
- Night shift allowance
- Medical allowance (payments made by the employer in lieu of the medical benefit)
- Newspaper Allowance
- Attendance Bonus,(allowed by certain employers discourage the workers from absenting from the job)
Exclusions:
- Annual bonus (as the periodicity of payment is more than 2 months)
- Incentive or production bonus paid at an interval exceeding 2 months.
- Sum paid or payable as travelling allowance
- Any sum paid to the person employed to reimburse the special expenses incurred on him by the nature of his employment; or
- Any gratuity payable on discharge
- Payment made on account of Leave encashment
- Any contribution paid by the employer to any pension fund or provident fund under the Act
- Amount collected by employers from the customers as service charge and remitted to employees are not part of wages
Last revised: Last revision in the wage limit made took effect from 1st Jan 2017