Dear Experts
i have an case, where one of our employee " working with us as part time job". He is simultaneously working in other reputed organizations, where he has no ESI & PF benifit. He would like us to extend him ESI & PF benifit from our organization. He is not taking any benifit from his regular employer.
Now pls help us on
1) Can we extend ESI & PF benifit to such part time employees
2) He is earning more than 15000/- from his main employer. but from our organization he is taking on 6000/- lumpsum
3) We are aware of above facts, what are legal obligations for us as employer
4) What are legal obligations for him as employee
5) We would like him to continue working with us...kindly help on above questions and how we should proceed matter legly safe

From India, Delhi
1.All categories of employees covered under this act, whether they are regular, Casual, Badli, Temporary contract, Part time
2. If he is on your payroll then you should deduct PF & ESI.
3. In your organist paying 6000/- then mandatory to deduct ESI as well PF.
4. Through appointment letter you may take him on company pay roll.

From India, Mumbai
Dear Aditya
Thanks for the reply. Specifically i am concerned for the legal problem for employer and employee as well
i) because he is working in two organizations, do we are under any legal obligation for extending ESI benifits to such employee who's earning more than15K. does is comes under misrepresentation of facts and attract any penality for employer as well as employee

From India, Delhi
1. Two companies work considers different, concern to you, need to pay on 6000/-(ESI and PF), if he is receiving salary from your end then he will your employee so you need to contribute on your pay.
2. If you will follow this rule then it will be consider legel process from your organization. don't bother about other pay of him, that is responsibility of concern org. not yours.

From India, Mumbai

1. While submitting declaration form in respect of any employee for coverage under ESI Act, both employee as well as employer signs/verify the same. The employee is required to disclose correct facts in said declaration form. In case, later on it is found that the person so made "employee" under said Act is actually a regular employee of another firm/concern and is not coverable under said Act, it will result to miss-representation or wrong submission of facts and is an offence for both employee and employer punishable under section 84 of said Act. The benefits so received falsely by such employee to which he was was not entitled are recoverable under section 70 of said Act.

2. ESIC in number of instructions have stated that part-time persons doing work in number of units are not coverable under said Act. But this fact is required to be proved on the basis of documents/records. For example if an Accountant is maintaining accounts for a number of firms and he does work not on any fixed hours and times and does the work also at his own office or residence, then in such circumstances, the said person will not be coverable, in my opinion under said Act. But in case he is doing such accountancy work for only one or two firms while sitting in their firms, the decision may be different and he will be coverable provided his salary from both units does not exceed coverable limit. Thus, every case is to be decided on the basis of facts of each case. But here as per example given by initiator of this thread, the employee is already getting wages exceeding to coverable limit from one of firm/unit and is definitely not coverable under said Act.

3. Kindly also see provisions of Regulations 38 & 39 of ESI (General) Regulations, 1950 framed under said Act, which, I think will also be helpful in the matter. However, I will also suggest to please confirm in writing from the appropriate office of ESIC before deciding in the matter so that there may not be any erroneous coverage of any employee.

From India, Noida
The issue raises some interesting questions about eligibility of an employee under different employment for ESI benefits. On one hand the Act seems to determine eligibility of an employee with reference to the applicability of the Act to that establishment under Sec.1(4) & (5) and the wages drawn by the employee under Sec.2(22) read with Rule (50).If so, the employee is not eligible for ESI in respect employment under one employer because he is drawing wages more than Rs.15000/-p.m while he becomes eligible for the same in respect of employment under different employer.If you go by Sec.38, the Act fixes the liability on the employer to cover all persons employed in the insurable employment. If the coverage is only employer wise and establishment wise, the second employer needs to cover such part employee. However it raise another question - whether an employee who prima facie becomes ineligible for ESI benefits under one employer, can simultaneously become eligible for the same under different employer..The issue would have been resolved if both the employments could be clubbed to determine the wage limit.It is not the case which makes the case further intriguing.

However Reg.38 provides some answer to the problem.It sates that where an employee is ordinarily employed by two or more employers in a wage period, the employers of such an employee may, if they think fit, submit to the Corporation a scheme for the payment of the contributions in-respect of such employee and the Corporation, if it is satisfied that the scheme is such as will secure the due payment of teh contributions, approve such a scheme subject to such terms and conditions as it may think necessary.

Provided that if no such scheme is submitted by the employers, the Corporation may specify that any one of such employers shall be treated as the employer for the purpose of provisions of the Act.

There is a catch in this provision also as it is not known whether the provision is applicable only in the case of an employee becoming eligible for ESI benefits under both the employers unlike in the instant case. Nevertheless, Reg .38 opens the door to resolve the doubt by enabling the employers to refer the case to ESI jointly so that the Corporation can determine whether the employee is eligible for ESI benefit and if so who shall contribute.

Hope this helps.


HR & IR Advisor

From India, Mumbai
Dear Experts
Thanks for your valued inputs, Little confused what to do
1) i spoke to one ESI inspector, that again has no firm answer, he agrees to both ,employee is eligible for ESI as well miss representation of facts depends on sole discretion of ESI inspector. if he wants to put organization in litigations, he simply mark his objection , then its responsibility of employer to get its clarification from courts
2) As an employer we can not refer case to ESI jointly.
I hope to get some more inputs and clarity,Kindly refer this thread to other experts as well who can help,

From India, Delhi
If it is not possible to refer the case jointly to ESI, you can refer it individually as the Act itself hints at such reference in case of doubt.Other views are welcome.
HR & IR Advisor, Navi Mubai

From India, Mumbai
Dear M.I.L.
1. Instead of writing such wrong position as mentioned above viz.-"miss representation of facts depends on sole discretion of ESI inspector" and "then its responsibility of employer to get its clarification from courts", it is always better to comply with the provisions of Acts and rules/regulations framed thereunder properly. Violation of Act and rules / regulations comes into knowledge of authorities by various means including through working of Branch Office ESIC.
2. The prosecution of employer and employee is sanctioned by the higher authorities and in such situation ESI Inspector, in my opinion, will be of no help.
3. Even if ESI Inspector has assured you that he will not point out any error at your /your company level, in my opinion, it is still not proper to violate the provisions of said Act & rules/regulations framed thereunder.

From India, Noida

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