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CS Executive · Setting Up of Business, Industrial and Labour Laws · Various Initial Registrations and Licenses

Ganga Packaging Ltd runs a factory in Kanpur with 15 employees. Under the ESI Act, 1948, an employee earning Rs 19,500 per month is considered. Which statement is correct?

The factory is covered and the employee earning Rs 19,500 is an insured person. ESI applies to factories with 10 or more persons and covers employees with wages up to Rs 21,000 per month. The Rs 15,000 figure is the EPF wage ceiling, not the ESI limit.

  1. AThe factory is covered only if it has 50 or more employees
  2. BEmployees earning above Rs 15,000 per month are covered
  3. CThe factory is covered, and an employee earning wages up to Rs 21,000 per month is covered as an insured personCorrect
  4. DESI covers only employees earning below Rs 10,000 per month

Explanation

ESI applies to factories and other notified establishments with 10 or more persons, and employees with wages up to Rs 21,000 per month are covered. With 15 employees the factory is covered, and the Rs 19,500 earner is within the ceiling. The Rs 15,000 limit relates to the EPF wage ceiling, not ESI.

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