ESI Coverage Confusion: How to Ensure Benefits for Workers in Distant Units?

Dear Senior,

Please, if you can help me with an ESI applicability problem.

My company has three production units. The registration office is located in Baroda where we have one production unit, and all workers in this unit are covered under ESI. The other two units are 35 km away from the registration office in Baroda. The workers at these units are from Baroda, and we have arranged a bus service for transportation to and from work.

The issue we are facing is that the two units, which are managed by the head of Baroda and are located 35 km away, do not have ESI coverage. My confusion arises from the fact that since the registration office is in Baroda, I believe these two units should also be covered.

Please guide me and clarify so that I can ensure ESI benefits for the workers in these two units as well.

Thank you.

Dear Roshni,

If the other two units are falling under a Non-Implemented Area, you cannot extend the benefits under the ESI Act, irrespective of where the employees are residing. This is because in the event of any accidents, the ESI authorities will inspect the causes and the place of the accident. If they find that the accident occurred in a Non-Implemented Area, the employees will not be entitled to benefits.

Please check with the local ESI authorities accordingly for the coverage.

I hope this is clear to you.

Regards,
Datta.

Dear Roshni,

I am in agreement with Datt's view. The units which you mentioned fall under the non-implemented area, and ESIC is not applicable to said units.

Deepak

Dear Sir,

Thank you for your guidance. In the production area where two units are working, there is no applicability of ESI. However, the registration address of the company is in Baroda (where one production unit and the corporate office are located), and ESI applicability is there.

Thank you again, Sir.

Roshni Joshi

Dear Roshni,

I agree that the ESI Act applies to your Head Office and one production unit situated in Baroda. The ESI Act also states that once the Head Office of any establishment is covered under the Act, all connected branches (across the country) falling under the Implemented Area will also be directly covered under the ESI Act. However, as you mentioned, the two production units are in a Non-Implemented Area, so there will be no coverage.

You will need to prepare separate salary/wage and labor charge records for these non-implemented area units to ensure exclusion from the Salary Heads and compliance during inspections.

Thanks and regards,
Datta
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