ARREAR WAGES ON ESI - APPLICABLE?

[venkat eswaran]

Dear Sirs,

In our company management approved for salary increments this month [may] with effective from last month [ apr-13].

We have to pay arrears payment to all employees.  We are going to pay PF arrear also for all emploees.  My question is whether ESI is also to be paid in arrear salary both employees and employer contribution?

For some employees we have paid ESI in apr-13 now in may-13 they crossed the ESI limit Rs.15000/- . Whether we have to continue to dedeuct ESI till halfyearly till sep-13 even they crossed ESI limit?

Kindly give ur valuabel replies

Venkat

 

 

[RAMDAS IYER]

dear venkat eswaran

yes, you have to deduct ESI on the arrears of wages as well. Sec 2(22) of the ESI Act, 1948, which defines wages, makes it clear that wages "means ALL remuneration, whether paid or payable".

If, because of the increment, someone crosses the rs. 15000/ thershold, you have to continue to contribute and deduct ESU, till the end of the Contribution Period,which is Sept 2013.

regds,

Ramdas.S.Iyer

 

AI Summary

ESI contribution: arrears of wages remain subject to employee and employer contributions until end of contribution period. Arrears of wages arising from a salary increment are subject to ESI deductions and employer contributions because the statutory definition of wages covers all remuneration paid or payable; if an increment causes an employee to cross the contributory threshold, deductions and employer contributions must continue for that employee for the remainder of the contribution period.