Revisions to the ESI Limit
The Employees’ State Insurance Corporation on 6th September 2016 announced that the monthly ceiling for ESI applicability will be revised from 15,000 to 21,000.
Existing Insured person now will also have an option to stay covered under ESI even after their wages cross the monthly ceiling of 21,000. At present, if the insured person loses their membership as soon as their wages are revised above the monthly ceiling,
These two changes will be effective from 1st October 2016.
At present, ESIC has 2.6 crore insured persons, which covers over 10 crore people, assuming four members of a family.
This change along with the proposed minimum wage revision in Delhi will have a significant impact on the bottom line of the industries. Though it improves the financial and social conditions of the workers, it also puts an additional burden on the employers as it will be difficult for them to pass on the additional cost to the employees take home salary. Leaving the decision to the insured person on deciding the membership will also have an impact on the Employer’s as the employees will expect the Employer to continue taking the additional burden. The revision is not clear on the implications if the Employer is unwilling to pay for ESI benefits beyond the ceiling after this revision.