01 October 2011
For a company having 37 employees, all earning above 20000 (gross earning) per month, except 2 freshers earning Rs.15000 (gross earning).They are just college passouts and depending on their performance their pay scale will be revised.Also, all employees' are provided with health insurance coverage.
Can someone please advice me if ESI coverage is mandatory.
02 October 2011
Applicability Under Section 2(12) The Act is applicable to the factories employing 10 or more persons irrespective of whether power is used in the process of manufacturing or not.
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons.
Further, u/s 1(5) of the Act, the Scheme has been extended to Private Medical and Educational Institutions employing 20 or more persons in certain States .
The State Govt. has been requested to issue notification under Section 1(5) on the lines of Section 2(12) keeping the threshold limit for coverage as 10 employees instead of 20.
The existing wage-limit for coverage under the Act, is Rs.15,000/- per month (with effect from 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.
In your case ESI Applicable, if two freshers will be paid more than 15000/- i.e Rs.15100/- then exemption clause will be applicable to your company
Thank you so much. I was under the assumption that all the 10 or 20 employee's should be drawing Rs.15000/- for a company to come under the ambit of ESI.
CAclubindia
