Is My Business Covered by the ESI Act with Only 11 Eligible Employees?

Dear All,

Under the ESI Act, any premises where 20 or more persons are employed or were employed for wages.

If we combine both, the total number of employees is 25, but out of which 14 are drawing a gross of more than 10000 pm. Therefore, only 11 employees come under ESIS, and the criteria for 20 employees are not fulfilled. Kindly confirm whether this establishment is covered under the above grounds.

Regards,
RNSWAMY

Yes, if there are only 2 employees who are earning less than 10,000 but the total number of workers is 20, then it will be covered under the E.S.I. Act.

With warm regards,

Ritesh Jain
ISS, AGRA
9412255662

For a factory, 10 employees are sufficient for coverage of ESI, whereas for other establishments, it is 20. A factory or establishment, once covered, will continue to be covered even if the number of employees falls below 10/20. However, for initial coverage, the number of employees who are out of coverage due to their salary being more than Rs 10,000 will not be counted. Therefore, if in an establishment (not a factory) all employees except 11 are drawing a salary more than Rs 10,000, then such an establishment will not be covered for the time being.

This is not so for the Employees' Provident Fund for which an employment strength of 20 is sufficient for coverage, irrespective of whether the employees receive a salary less than or more than Rs 6,500. If the establishment employs more than 20, then the establishment will be covered by EPF, and, of course, those whose salary exceeds Rs 6,500 will be excluded from contribution and coverage.

Regards,

Madhu.T.K