Current salary threshold for ESI coverage

• The current salary limit for coverage under the Employees’ State Insurance (ESI) scheme is ₹21,000 per month.
  
• This limit applies to an employee’s gross monthly wages, including allowances.
  
• For persons with disabilities, the wage ceiling is ₹25,000 per month.
  
• Employees earning up to this limit are mandatorily covered under the ESIC Act.
  
• Wages exceeding the limit make the employee ineligible for further coverage under ESI.
  

What constitutes salary for ESI calculation

• Salary includes basic pay, dearness allowance, city compensatory allowance, and other regular allowances.
  
• It also covers overtime, incentive bonuses, and arrears paid periodically.
  
• It does not include gratuity, retrenchment compensation, or contributions to provident fund.
  
• The gross amount before deductions is used to determine ESI applicability.
  
• Employers must consider all applicable wage heads for accurate assessment.
  

Effect of exceeding the wage limit

• If an employee’s salary crosses ₹21,000 during the contribution period, they remain covered until the period ends.
  
• The employer must continue contributions until the end of that contribution cycle.
  
• Once the next cycle begins, if the salary remains above the limit, the employee is excluded from further coverage.
  
• ESIC benefits already accumulated remain valid for the qualifying benefit period.
  
• Re-registration is not allowed unless the salary again falls below the limit.
  

Applicability at the time of joining

• Employees earning up to ₹21,000 at the time of joining are to be registered immediately.
  
• Employers must not delay registration by anticipating future increments.
  
• The wage limit is assessed at the time of employment and during each contribution period.
  
• Failure to register eligible employees is treated as non-compliance.
  
• Employers are legally bound to ensure timely and accurate registration.
  

Review and revision of salary limit

• The salary limit is subject to revision by the central government based on economic conditions.
  
• Revisions are notified through official circulars and notifications.
  
• Employers must stay updated on changes to wage ceilings.
  
• Any increase in limit results in wider employee coverage under the scheme.
  
• HR and payroll systems should be promptly updated to reflect such changes.