Sr. Hr Executive
Bharat Gera
Principal Hr Consultant
Srinath Sai Ram
Hr Manager
+1 Other

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Hi Experts,
A factory that employs 6 persons has engaged few persons through a contractor.
Number of persons employed through the contractor are 4 including the contractor himself.
Since the total count is 10, should the employer register his factory under ESI Act, 1948.

From India, Mumbai
Yes ESI would apply if those people work under his supervision; see this

Employees State Insurance or ESI Act, Rules, Forms, Returns : Simplified: Employee's Covered under ESI Act, 1948


Any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and

who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment whether such work is done by the employee in the factory or establishment or elsewhere; or

Who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or

Whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service;

Includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961, or under the standing orders of the establishment;

But “Employee” will not include:-A

Any member of the Indian naval, military or air forces; or A

Any person so employed whose wages excluding remuneration for overtime work exceed such wages as may be prescribed by the Central Government:

PROVIDED that an employee whose wages excluding remuneration for overtime work exceed such wages as may be prescribed by the Central Government at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period;

From India, Kolkata
Thanks. Is a Contractor lending the services of his employees to the principal employer is to be counted for the minimum number of employees for coverage under ESI Act?
From India, Mumbai
Dear Mr Royal, you have to take in to consideration Total Direct Employees & Total indirect Employees for determining Total Strength of the Establishment for the purpose of applicability of ESI Act If the Contractor is Providing only Man Power, he need not be counted as Employee.But, If, Contractor himself working as Employee, in addition to being Contractor, then he also needs to be counted as Employee..
From India, New Delhi
Dear Royal,
The minimum count of employees to be registered under ESIC is 20, thus you need not to get registered under ESIC but if your contractor employs more than 20 employees even though they are not working in your organisation, he needs to get registered under ESIC.

The number of employees here means total number of employees on the rolls of the establishment including workmen. It does not say 20 workmen.
From India, Thane
The Minimum Number of Employees required for obtaining Registration varies from 10/20.It is better to verify the actual Number of Employees required for Registration i.e 10/20 depending upon Location of Factory/Establishment & respective State ESI Rules.
From India, New Delhi
Please peruse the Advertisement from ESIC Regarding Applicability of ESI Act to Factories/Establishments
From India, New Delhi

Attached Files
File Type: pdf ESI Advertisement Dated 27-07-2011.pdf (276.4 KB, 87 views)

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