Dear Sir,

In one of my earlier company they were following the "NOTIONAL WAGES" for determination of Coverage under ESI, Which is also as per the Act. Act says that, for coverage under the Act Wages Paid/Payable should be taken.

But one of the ESI Inspector is interpreting that for determination of coverage consideration of "Notional Wages" should be restricted to Basic and DA only. Is it correct? If so is there any Case Law for this? If wrong? Is there any Case Law in support of this?.

Further, ESI Act no where says about 'Notional Wages' it says only Paid/payable WAGES . Payable is nothing BUT total salary irrespective of his attendance.

I would like to have the views of the learned stalwarts of CITE HR on this for my benefit as well as of the benefit of others.


With Best Regards,
Hitenshah

Dear Hiten,

It attracts all the components being paid in cash at the end of the month but doesn't attracts any incentives or bonus.
In general Gross per month salary is considered for ESI contribution.

Basic and DA is considered in case of PF contribution only.

Regards,
Soletti