Esi, salary reduce less than 15000/- in between the year

This query is : Resolved

Amit Bansal (Querist)
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03 May 2012 There is a employee, whose salary in the month of april is more than 15000/-, but in may it is less than 15000/-, now whether, he is eligible for benefit of ESI or not?

SANJAY

SANJAY (Expert)
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03 May 2012 Dear Amit,

As the Gross salary is more than Rs.15000/-. ESI is not applicable, As per ESI Act, It is not required to that the employee gets in a month is less then 15000/- due to leave etc.

Amit Bansal

Amit Bansal (Querist)
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05 May 2012 So, it means here ESI is not required to deposit?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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24 July 2024 If an employee's gross monthly salary crosses the threshold of ₹15,000 in one month (e.g., April), they are not eligible for ESI (Employee State Insurance) benefits for that month and subsequent months, even if their salary falls below ₹15,000 in subsequent months (e.g., May). This is because once an employee's salary exceeds ₹15,000 per month, they are considered outside the scope of ESI coverage.

### Specific Points to Note:

1. **Salary Threshold**: ESI coverage applies to employees earning ₹15,000 or less per month. Once an employee's salary exceeds ₹15,000, they are exempt from ESI coverage until the end of the contribution period.

2. **Contribution Period**: The contribution period typically spans six months (from April to September and from October to March). Once an employee crosses the threshold in any month within a contribution period, they remain exempt from ESI for the entire contribution period.

3. **Impact**: If the employee's salary in April was above ₹15,000, they are not eligible for ESI benefits for April and the subsequent months of that contribution period, including May.

### Practical Example:

- **April Salary**: ₹16,000 (above ₹15,000) - Employee not eligible for ESI for April and subsequent months until the end of the contribution period (September).
- **May Salary**: ₹14,000 (below ₹15,000) - Employee still not eligible for ESI for May because the exemption continues for the entire contribution period (April to September).

### Conclusion:

In your scenario, if the employee's salary in April was more than ₹15,000, they would not be eligible for ESI benefits for April and subsequent months within that contribution period, regardless of whether their salary falls below ₹15,000 in May or any other month within the same contribution period.

For precise details and to ensure compliance with ESI regulations, it's recommended to consult with the employer's HR department or a qualified professional who can provide advice tailored to the specific circumstances and current regulations.