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Employee State Insurance Act

Section:72, Reg 97 :Employer not to reduce wages or reduce benefits

Obligation : Not to reduce wages of any employee due to ESI payments on the employees behalf

Type:Preventive Compliance Frequency: Quarterly

Action to be taken:
Ensure that no one by reason only of his liability for any contributions payable under this act should directly or indirectly, reduce the wages of any employee, (except as provided by the regulations), or discontinue or reduce benefits payable to the employee under the conditions of service which are similar to the benefits conferred by this Act.
If an employee avails of leave for sickness, maternity or temporary disablement, the employer can deduct from the leave salary of the employee, the amount of benefit available to the employee under the Act for the corresponding period

Audit Requirement:
Have no reduction in wages of employees, or reduction or discontinuance of any benefits to the employee been made in contravention of the ESI Act ?

Supporting Documents:
Written Confirmation of Compliance

Related Triggers:
Deduction or Fine From Wages
Payment of Wages

Related Keywords:
Deduction/Fine From Wages
ESI (Employee State Insurance)
Payment of Wages

Related Sections:
Employee State Insurance Act, 1948
Chapter:Benefits| 72:Employer not to reduce wages etc.:
No employer by reason only of his liability for any contributions payable under this Act shall, directly or indirectly, reduce the wages of any employee, or except as provided by the regulations, discontinue or reduce benefits payable to him under the conditions of his service which are similar to the benefits conferred by this Act.


Employee State Insurance (General) Regulations, 1950
Chapter:Miscellaneous| 97:Discontinuation or reduction of benefits:
An employer may discontinue or reduce benefits payable to his employees under conditions of their service which are similar to the benefits conferred by the Act to the extent specified below, namely-

(a) from the date of the commencement of the first benefit period following the appointed day for his factory or establishment-
(i) sick leave on half pay to the full extent;
(ii) such proportion of any combined general purposes and sick leave on half pay as may be assigned as sick leave but in any case not exceeding 50 per cent of such combined leave;

(b) any maternity benefit granted to woman employees to the extent to which such woman employees may become entitled to the maternity benefit under the Act:

Provided that where an employee avails himself of any leave from the employer for sickness, maternity to temporary disablement, the employer shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he may be entitled under the Act for the corresponding period.