E S I Applicablity

Dear
One manager x has hired personnel driver on his car who is taking manager
to office and bringing back to home and doing duty of manager as per his instructions.Manager pays Rs 8000 per month to driver.Same Rs 8000 is paid by company to said manager as re-imbrusment against driver salary.
Now my question is whether ESI will be applicable on same amount paid to driver.
J S MALIK

Dear Mr. Malik
Driver is not on company roll, hence the company is not liable to pay contribution for ESI.
But you should check with your Accounts dept. in what head, the reimbursement for driver salary is booked. If the same is booked against salary of driver then the ESI contribution would be payable to ESI.
Thanks
Rajeev Kumar Saxena
9818111867
Dear
One manager x has hired personnel driver on his car who is taking manager
to office and bringing back to home and doing duty of manager as per his instructions.Manager pays Rs 8000 per month to driver.Same Rs 8000 is paid by company to said manager as re-imbrusment against driver salary.
Now my question is whether ESI will be applicable on same amount paid to driver.
J S MALIK

Dear Mr. Malik,
Since the amount is being paid to the manager as perk and the payment is being made on reimbursement basis this would not attract ESI contribution. Furthermore, the driver is neither in company's roll not employed through a contractor.
regards,
manoranjan

Dear Malik,
Driver salary is part of employee entitlement as a part of organisation provided benefit, hence there will be no ESI applicable to Employee's driver.

Dear Malik,
As detailed by others, if the driver salary is being paid as reimbursement, then he will not be covered under ESI.
But if driver salary is being paid separately to the driver as salary then he shall be covered under the ESI.
Regards,
Amit Seth.

Driver Allowance is being paid to enable the employees to appoint a driver at their own level . These drivers, employed are not being paid salay directly by the company.
In case, where "Driver Allowance" is being paid to an employee & driver is not being engaged by that employee, then the allowance paid as such will be considered as wages.
In case, where "Driver Allowance" is being utilised appropriately, then driver so engaged will be covered as an employee & contribution will be payable on the amount paid to the driver as salary and booked in the ledgers of the emplyer under the heading "Driver Allowance"

Hi All,
My query is that we have engaged an ETP Operator in our factory through ABC agency. The operator is employee of this agency and he maintains our effluent treatment plant daily in eight hours. We are paying Rs.7865/- including service tax to this agency. Our MD ask to deduct ESI on the above amount. Is ESI applicable on that amount ?
Please suggest.
Regards.
Rajesh

mr rajesh
why u are putting question inbetween .i have asked one query and discussion is going on that.for your query u should raise querstion in a professional way.
tks
js malik

Dear Mr. Malik,

From the legal point of view, Mr. Saxena is absolutely right and I am fully agree with him.

You will have to check the narration of books of account that in which head, the said reimbursement for driver salary is booked again I agree with Mr. Saxena that If the same is booked against salary of driver then the ESI contribution would be payable.

Point to be discussed: I would like to ask Mr. Saxena that:

1. I agree with you that ESI would be applicable but my query is this who will bear the cost? whether Company or Manager?
2. Employer & Employee relation is between "Manager & Driver" thus manager has to pay or best way company can do one thing, company can ask his manager to have an mutual agreement with his personal driver in which salary should be shown with complete bifurcation and company has to fill "Declaration Form" under ESI Act (And show him as a contract employee, It will be useful at the time of any casuality) and company has to pay contribution as we pay under petty works i.e. repairing & maintenance, as per my openion.

3. As per legal point of view "Company is not liable to pay the ESI because company hasn't any Employer & Employee relation with said Driver but from statutory compliance point of view company must pay.

4. Suppose, any contractor who hasn't the ESI Code and doing some reparing work in the said premises than at that time company has to pay that amount and most of the companies are doing it.

Finally, I would like to thank Mr. Malik for raising this important issue.

Regards,
From-
Vijay Vashisth
Head HR
09992334610
Nippon Talbros Bawal
Rewari

2.

Dear Malik,
If the Driver has to covered under ESI Shouldn't he submitted his declaration form (As per norms)? and If he is entitled to ESI, would he not be entitled to other basic benefits also?