| ESIC on Arrears |
ESIC Vs Minimum Wages Arrears
What shall be the effect of increase in wages from a retrospective date?
This inquiry has come to us commonly and consistently discover individuals are wrongly interpreting law. As and when any increase in the wages/remuneration is pronounced with review impact, the risk towards installment of commitment accumulates just in the month in which the choice is reported and no commitment is payable on the back payments relating to the period preceding the long stretch of presentation/declaration.
Thus, In case the wages of an employee is increased from a retrospective date resulting in crossing the wage limit prescribed, its effect on coverage of that employee is only after expiry of the Contribution period during the currency of which such increase is announced or declared. The contribution on enhanced wages is also payable from the month in which such increase is announced. There is no need to pay the contribution on the arrears for the period prior to the month of declaration/ announcement/ agreement.
Make a note - this time don't pay ESI on Arrears due to increase in notification rate of Minimum Wages
Reference :- ESIC FAQ Booklet
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