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Coverage 
Exclusion of over time /remuneration 
for determining the wage ceiling under Section 2(9)(b)

Overtime / Remuneration is not a regular and continuous payment, but it is of an occasional nature. If overtime is also taken for coverage of an employee, he may be going out of coverage for some time and again coming back within the ambit of the scheme, when over time is not there. This frequent interruption from the scheme deprives him of the benefits admissible under the scheme even after making payment of contribution for part of a period. To ensure continued security and protection, over time is excluded for determining the coverage of employee. However, it is included for payment of contribution to cover the risk during the period he was on over time work, and to enable him to draw the cash benefits at an enhanced rate, by adding over time to his average daily wages, he is fitted into the next high slab in the standard benefit table for claiming cash benefits.

Did you know?

A factory, or establish-ment once covered under the ESI Act, remains covered even if the number of employees at any later stage falls short of the stipulated number of 10/20 employees or the manufacturing process therein ceases to be carried on with the aid of power.

  Definitions
  Factory
  Seasonal Factory
  Employee
  Manufacturing unit
  Wages
  Employer
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