Is ESI Applicable Or Not For IT Industry - CiteHR
Industrial Relations And Labour Laws
Sr Manager Hr & Administration
+2 Others

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As per ESI Act 1048, under section 2(12) and 1(5),it is applicable to all factories and establishments in India which have 10 or more employees.But the wage limit for its applicabilty,is 15000 per month. So if there is no employee or are less than 10employees with monthly wages as 15000 or less, but the employees with more than 15000pm are more than 10,then this ESI act is applicable or not? Can some experience HR manager in IT industry guide me on this matter?
MP Mittal

Hello Mr. Sachin,
That is fine and right that only employees below monthly salary of Rs.15000 are eleigible for ESI. But my question is that such employees are less than10 in our company but the other employees getting salary above Rs.15000 per month are more than 10numbers. So in such an environment, do we need to get a license for ESI or not. I think that there is no necessity for ESI license in such a case but it has not been authenticated anywhere. So can you oblige me throwing some light on this point?
Mahavir Mittal

ESI is applicable to all establishments employing 10 or more persons. That is, for the purpose of coverage of establishment and subsequent registration, only total number of employees is taken into account and for that the salaries of employees is not at all looked into. Also by registration it does not mean that there should be at least one person who will be covered but you can have nil returns filed each year. You can give coverage to those whose salary is within the limit as prescribed (say, Rs 15000, as of now but subject to change as proposed). Further you can include those who come in this bracket.

Hello Mr. Madhu, Thank you very much for your guidance. So it means I need to apply for ESI now whether there is any employee below Rs.15000 pm salary or not. I can send nil return. Mahavir Mittal
Dear sir
As per the act you have to apply for ESI registration, and if there is no contribution by the employee as well as employer you have to send the NIL returns
Thanks and regards

dear sir
I had come across a client who was an IT co. which had carried out building construction and furniture work in their co. In the ESI inspection records which reflected wages for such work, ESI was held payable so watch out for such loopholes.

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