ESI - Gramin Dak Sevaks : Small Analysis

Date : 3.7.2019

ESI - Gramin Dak Sevaks : Small Analysis

National Unions submitted one memorandum to Sri.Kamalesh Chandra, Chairman, GDS Pay Committee requesting to consider GDS in the pugview of ESI.

Committee accepted our request and suggested the Department of Posts to discuss this issue with Service Unions and do needful to all GDS.

But , Department not considered the Committee suggestion.

Then we put this issue in Strike demands.

Department reply regarding applicability of ESI to GDS is as follows.

 "Some of the GDS would over a period of time would draw more than Rs.21,000/- per month and thereby will in eligible for the scheme."

"As per ESI scheme , those GDS who are drawing more than Rs.21,000 per month are not eligible for ESI"

NUGDS stand :

As on date june 2019 2nd scale BPM will get Rs.16740/- ( Basic 14500 + DA 1740 + OMA 500).

But as per ESI rules, Basic + DA+ HRA is the maximum ceiling.

In our case only we have to consider Basic + DA i.e; Rs.16,240

Why we did't considered Rs.500/- is because of it is only a Office Maintanance Allowance not HRA.

From 2016 to 2019 July the DA is only 12%

On on avearage upto next pay commission i.e; 2026

the DA may be 36% only i.; Rs.5220/-

If we calculate the GDS Salary upto next pay commission , maximum amount they may received is only Rs.14,500 + 5220 

i.e; Rs.19,720/-

Rs.19,720/- is below the maximum ceiling of ESI.

As illustrated above how  the Department of Posts itself declared Gramin Dak Sevaks are not eligible for the ESI Scheme.

Down Down 

Postal Directorate

Down Down 

Communication Ministry.

ESI Guidelines are as follows :

The New #ESI Wage Ceiling And Its Impact.

Employees’ State Insurance or ESI is the insurance which provides medical care to industrial workers and other employees. You can use this insurance in case of sickness, maternity, injury and other medical-related matters.

The ESIC has now increased the wage limit for ESI Act to Rs 21,000. The wage ceiling was last raised in May 2010. Back then, the wage limit was increased from Rs 10,000 to Rs 15,000. Now the wage limit has been raised to Rs 21,000. This brings it in line with the wage limit for the Payment of Bonus Act.

Impact of increase in the ESI wage ceiling:

The increase in the wage ceiling for ESI from Rs 15,000 to Rs 21,000 means that an employer makes contributions for more number of employees earning between this limit. The important factor to decide whether an employee covers under the ESI Act is whether the employee’s monthly ‘wages’ exceeds Rs 21,000.

The wages here mean an employee’s gross earnings. I.e.,  The total of all earning heads.

The increase in wage ceiling impacts the finances of the employees. 

For the ESI Scheme contributions are made from both employers (4.75%) and employees (1.75%). So, the take-home salary of employees earning between Rs 15,000 to Rs 21,000 decreases as the employee contribution of 1.75%  deducts from their salaries.

Once an employee starts earning a wage of more than Rs 21,000, ESI contributions will be made only till the end of the contribution period. It is a 6-month period.

For E.g.: Consider that an employees’ gross earning is  Rs. 20, 000  in the month of April. In the month of July, that person gets an increment which leads him out of ESI coverage i.e, salary increases to Rs. 25,000.

In this case, the employee will continue to contribute 1.75% for ESI on Rs. 25,000 from July to September.  From the second half of the year i.e., October to March there will be no contribution towards ESI.

With the rise in the wage threshold, about 3.5 million employees will now fall under the ESI Act. From a company’s perspective, we see that the impact of this change is a financial one.

ESI wage ceiling for past 20 years is submitted below.

The maximum ceiling was raised from Rs.6,500/- to Rs. 21,000/- from 1997 to 2016.

Some proposals were are also made to increase the wage ceiling.

How, Department of Posts it self declared it is not applicable to GDS ?

In future , definitly they increase the ceiling limit at par with the ILO.

So, dont tell cook & bull stories , and provide ESI facilities to all GDS.

Ch.laxmi narayana