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ESIC UPDATE: BENEFITS OF ESIC SCHEME TO CONSTRUCTION SITE WORKERS W.E.F. 01.08.2015
Sources-

• ESIC Circular No P-12/11/11/60/2010-RevJI dated 31/07/2015
• ESIC Pune Circular No 33/S-11/site workers/ Insp/ 2015 dated 04/08/2015
• ESIC Circular No. P-12(11)-11/27/99-Ins.IV – Instruction No 4/99 dated 14.06.1999

Brief of the Amendment:

As per the amendment, it has been decided to extend the ESI Scheme to the construction site workers deployed in the implemented areas w.eJ 01.08.2015. As per ESIC Hqrs. Office instruction No. 4/99 dated 14thJune, 1999, the construction site workers were excluded from ESI coverage. However, as a result of this amendment, even these workers will be covered provided they are eligible employees working in an Implemented Area.

Scenario before the Amendment:
As per ESIC Hqrs. Office instruction No. 4/99 dated 14thJune, 1999, the construction site workers were excluded from ESI coverage. The construction workers were excluded primarily because these workers are mobile and migratory in nature.

Hence, if a construction agency was deployed on a construction site, only those workers who were not engaged in construction activity were required to be covered. .Also, In order to ascertain the eligibility of a firm/agency/establishment to be covered under ESIC Act, these workers were excluded. In simple words, only the office staff deployed at the site like Project Supervisor, Co-ordinator were required to be covered.

Practically, all the construction site contractors working in Implemented Areas were not covered as majority of their workers were engaged in Construction Activity

Scenario after the Amendment:

As a result of the amendment, the following implications occur:
• Construction Agencies not covered before : If they are engaging 20 or more eligible workers (drawing salary less than Rs 15000), they are required to be covered with effect from 01.08.2015 under Section 1(5) of the ESI Act. After coverage, all these employers are required to enroll the eligible employees for the benefits of ESI Act and ensure all compliances with regards to these workers are done. The coverage and date of effect has to be 01.08.2015.
• Construction Agencies covered before: If the Agency/contractor is already covered under the ESIC Act, then they have to enroll all the eligible employees working in the construction site with effect from 01.08.2015. As a result, the ESIC contribution per month will substantially rise for these employers

Course of Action for employers:

• Employers who are already covered by the ESIC Act and are employing construction site workers are advised to get these workers engaged on the construction sites in the implemented area registered online
• Employers are required to make payment of ESIC Contribution @ 6.5% for these workers similar to other covered employees
• Employers are guided these workers to the nearest ESIC office to obtain Pehchan Card.
• Employers are directed to furnish list of sites in the implemented area along with the number of site workers or employees where the construction site workers have been deployed.
• For those Construction Agencies who are not covered are required to cover themselves under ESI Act and ensure all the above compliances are done

Benefits to the workers:
1. Complete medical care (primary to tertiary)
2. Cash benefits in the event of employment injury, death, disablement, maternity and unemployment

Payrule Opinion:

The ESIC has initiated a special drive to ensure all such agencies are covered and the compliances are done. The ESIC is obtaining information about Construction Agencies/Contractors from various sources mainly Employees Provident Fund Organisation. The internal deadline is 31.12.2015 by which it is expected that the above amendment is completely implemented.

According to unconfirmed sources in Pune, the above order has been challenged by the Builder Lobby and the stay order has been issued for a month. So, the matter is sub-judice.

We advise the the employers wait for the final order before going for coverage under the ESIC Act and enrolling all the construction workers.
is passed.

Enclosures :

• ESIC Circular No P-12/11/11/60/2010-RevJI dated 31/07/2015
• ESIC Pune Circular No 33/S-11/site workers/ Insp/ 2015 dated 04/08/2015
• ESIC Circular No. P-12(11)-11/27/99-Ins.IV – Instruction No 4/99 dated 14.06.1999,

Disclaimer : We do not take any financial or other liability for any obligation that may arise to any one as a result of this document and the content therein. We advise that the experts be consulted.

"PayRule HR Solutions Pvt. Ltd. is an end to end Payroll Management and Labour Law Advisory Firm based in Pune"
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The relevant cicrculars and sources attached herewith
From India, Pune

Attached Files
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File Type: pdf ESIC Circular_Applicable to Construction Sector.pdf (818.5 KB, 624 views)
File Type: pdf ESIC Pune_ Letter to All Employers.pdf (1.00 MB, 723 views)
File Type: pdf Payrule Update_ESIC Applicable to Construciton Workers_01082015.pdf (151.4 KB, 477 views)

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