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The client has 0 employees for the past 6 months and is doing just trade business (he buys and sells with a margin directly with no involvement, like a broker). Before covid, he had a factory but laborers ran away after lockdown and now he does trade. He is planning to restart the factory soon, until then he wants to know whether he should have his own PF/ ESI done since he has 0 employees or should he do his daughter's PF/ESI who also works with him. Both have a PPF account.
He is worrying 0 employees will make it look like he is doing something wrong and he never had PF/ESI for his daughter, so he is in the problem or not, and I have no idea what to say to him. Please help?

From India, Bengaluru
He shows daughters gross salary as 60000/- So, can she now have PF/ESI and what will be the amount of contribution for such a salary.
From India, Bengaluru

@Shanti It is not mentioned that before lock down and exit of employees, the unit has registration with ESI/PF or not

@Glidor Sir, the unit is a factory and it has esi/pf registration and used to contribute both esi/pf before exit of all employees. The daughter has been working with her father for past 2 years, but never deducted esi/pf. Nor is there deduction for her father (owner of the business). It seems they both are doing all the work now (via phone calls) and are actively looking for workers to restart factory soon, but are worrying about compliance problem since they have not filed any return for past 6 months for ESI and only filed NIL return for PF.
From India, Bengaluru


I would request you to kindly go through the new Labour Code - Code on Social Security, 2020.

However, for your reference and information, I am giving below the crux of PF/ESI applicability.


Major changes in the ESI conditions are included in the New code. Currently ESI is applicable to only establishments (Factory, Shop, Commercial establishments, Educational Institutions, Hospitals, and Laboratories) where minimum 10 employees have worked for minimum

one day. However, as per new Code, even if only one employee is working in establishments where hazardous or life threatening work is carried out, ESI conditions shall be applicable.

Currently ESI Act is not applicable to Plantations. However, as per new Code, if Employer is willing, ESI act could be made applicable to all workers, deployed in the Plantations by the Employer. ESI benefits could be made applicable to small establishments also where less than 10 employees are working, if the employer and majority of employees apply for the same.

At present EPF Act is applicable to only those establishments which are included in the schedule, which is part of EPF Act. As per the new Code, EPF act shall be applicable to all establishments having 20 employees at the minimum. According to the prevailing conditions, if the employee strength is reduced from 20, EPF Act shall be continued to be applicable. So also with ESI Act. If the employee strength is reduced from 10, ESI Act shall continue. But, as per the new code, if the employee strength is reduced from the stipulated number, if Employer and majority of employees demands, they can be exempted from these Acts. "

Based on this you may derive a decision.

From India, Aizawl
Now i am confused sir. Should the factory go for ESI/PF exemption from the acts or should he file PF return for his daughter? And how to cancel ESI/PF of the factory now without closure of the factory?
From India, Bengaluru

if all employees are exit then ESIC return can not be filed with zero, but in EPF it does not need to file ECR, however minimum admin charges are payable monthly,
@dauther issue
if daughter is drawing salary from the establishment, then she would be treated as employee, and thereafter the eligibility would calculated for ESIC /EPF and other deductions / contributions
Owners (other than whole time salary paid sitting directors) , are not covered in EPF as they dont fulfil the term of employee

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