Company to hire Labours on Contract basis comes under ESIC Act? - CiteHR
Harsh Kumar Mehta
Consultant In Labour Laws/hr
Jagdish.pathak
Payroll Services

Cite.Co is a repository of information created by your industry peers and experienced seniors sharing their experience and insights.
Join Us and help by adding your inputs. Contributions From Other Members Follow Below...
Dear All,
One of my Colleague has recently started his Construction Establishment. They get projects from Builders and then they start their pre-engineered steel building systems (PEB). As they are going to hire Labours on Contract basis. I would like to know whether his Company comes under ESIC Act or not. Also what should be the Employee Joining formalities of newly established Company.
Thanks & Regards
Meenakshi Kiran

Dear Meenakshi,
if the number of employees are 10 (directly or indirectly) he has to get the registration formalities under the ESIC Act.

Thanks Mr. Jagdish for the advise.
1. Dear member, I think, to say that in respect of construction companies/units, the threshold for coverage in Maharashtra is 10 or more appears to be not correct. I think, you should confirm the position from ESIC nearest office, where your unit is located whether the State Govt. has issued notification under section 1(5) reducing the threshold of coverage to 10 or more persons in respect of shops and other establishments. As per my knowledge, earlier such threshold of coverage under section 1(5) of said Act was 20 or more employees. I am not sure in respect of present position.
2. Further, the coverage under ESI Act, 1948 and rules/regulations framed thereunder is of two types depending upon the facts of coverage of the main builder/unit/establishment. Firstly, if the main builder/unit/establishment is already covered under ESI Act, 1948, the contractor(s) is also required to make compliance even though it has employed only one coverable person. If the contractor construction firm is not having its own code under under ESI Act, 1948, it can make compliance on code number of principal employer i.e. on the code number of main builder/unit. Secondly, in case main construction unit/principal employer is not covered, then the contractor firm/construction company can also be covered independently under section 1(5) of the said Act if it employed minimum persons as per requirement of State Govt. notification under said section.
3. Therefore, it will be more better if you may discuss the issue with principal employer and also with the officials of nearest office of ESIC.

Thanks Mr. Harsh will definitely get the info from principle Employer. Thanks for your advise.
Dear member, I think, your unit should also consult nearest office of ESIC i.e. their Social Security Officer as per opinion, I expressed above. It has been observed that some times, the officials of principal employer are also not having complete and correct information on ESI related matters.
This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2020 Cite.Co™