How Do You Keep Track of ESIC and PF for Piece-Rate Workers? Need Your Guidance!

Dear All,

Can anybody guide me on how to maintain records for workers recruited on a piece-rate basis, especially regarding their ESIC and PF contributions?

Dear Mr. Gupta,

The production record for piece workers has to be maintained. The price of the article made by each piece worker has to be described, and the wages register must show the number of pieces made by a particular employee in a month, and the earnings have to be calculated accordingly. The important issue here is the coverage of such piece-rated employees under the ESI Act and EPF Act.

Under the EPF Act, if an employee's earnings in any given month fall below the exempted limit of Rs. 6500/- per month, then he has to be enrolled as a member of PF. Please bear in mind that if his earnings, after he once becomes a member of PF, increase above Rs. 6500/- per month, he will still remain a PF member.

Under the ESI Act, if an employee's earnings in any given month fall below the exempted limit of Rs. 10000/- per month, then he has to be insured as an employee under the ESI Scheme. If his earnings, after he once becomes an insured person, increase above Rs. 10000/- per month, he will remain covered under the ESI Scheme until the next contribution period. For example, if a piece worker earned Rs. 9000/- in May 2009, then he has to be covered under the ESI Act. However, if his earnings increase and he always gets Rs. 10001/- or more in all the months, there is no need to continue him as an ESI insured person, and from October 2009, you may not cover him under ESI.

Goodbye

Dear Puneet Ji,

Thank you for your valuable advice. I am working in a garment manufacturing unit where we are facing a high turnover of workers. I have some doubts that I hope you can help me clarify.

1) Currently, the minimum wage in U.P for skilled category workers is Rs. 4267 per month. If a worker, let's say X, has worked for 15 days and earned Rs. 3000 during that period, should he be covered under the ESIC and PF Act?

2) What records or registers need to be maintained for piece-rate workers?

Best Regards,
P.C. Gupta

Dear Mr. Sagid,

Please clear one more doubt. If any piece-rate worker is working during extra hours/overtime hours, then in this case, what are the formalities...

Dear Puneet,

You have not understood my statement above; I clearly said that the monthly average should be considered. I think you have misconstrued my sentence to mean not to consider a few days as earning less wages; the monthly average is what matters.

Yes, we have attached the petition of Kerala HC, and we also have a petition that was challenged in the Supreme Court. If you need a copy of the Supreme Court decision, I can forward it to you.

You mentioned in point no. 2 to multiply by 26; I did not mention this. Please clarify why you have attributed this to me illegally.

Please keep in mind that I am also an LLM graduate and hold a higher position than you. I am also a member of the ESI committee. We are not creating historical records or notes; this is not a petition where I need to elaborate with statutory law. I have attached a file with a good example that even a layperson can easily understand.

The reason why cases are pending in court is due to unnecessary elaboration with illegal points. Sometimes the meaning can be confusing to some individuals.

Best Regards,

Sajid Ansari - Delhi

Dear Sajid,

I think you are getting overly excited and smart enough to edit your posts. Kind attention to your edited post: "Last edited by globaloverseas144; Yesterday at 03:31 PM.. Reason: calculation."

In your said post, there were no calculations given by you!

For other readers on this thread, I must tell them that earlier Mr. Sajid has written something else on this thread, which prompted me to reply to it. Everyone could very well appreciate that I have not used any defamatory or offensive language. Rather, I started my sentence addressed to Mr. Sajid with the words "Please don't take it otherwise."

It is not understood why Mr. Sajid is getting too rash.

Secondly, Mr. Sajid, in your last post, you said that I am putting an illegal blame on you. But my dear friend, please read my post carefully. I have reproduced the extracts of the ESI Employer Guide mentioned on Page 31, which was also attached to the post.

Thirdly, Mr. Sajid, you said that you are an LLM graduate and claim to have a level above me. No problem for me, you may be at a very high level from where you see yourself to be "GOD." Remain there in an isolated world of your own. If you cannot discuss a point in a good mood and behavior, I must say please do not reply. A Law Graduate or, I must say, a Master of Law must support their reply with some concrete evidence, or else they would make their own mockery in front of others.

Mr. Sajid, you are saying yourself to be an ESI committee member, but I feel surprised that you are not aware of the ESI Employer Guide wherein they have given a method of calculation of notional wages for piece-rated employees.

What I was pointing out were the provisions and the legal points. If you have the latest law from the SC, you may put it in the thread for the members to read.

Regards,

Always be cheerful and do not attract unpleasant conversations.

I

Wage Ceiling

The monthly wage limit for coverage under the ESI Act would be as prescribed by the Central Govt. in the ESI (Central) Rules 1950. The wage ceiling for coverage of employees (excluding remuneration for overtime work) is Rs. 10,000/- (w.e.f. 1st October 2006). Previously, it was Rs. 7,500/- per month w.e.f. 1st April 2004 (Rule 50 of ESI (Central) Rules 1950).

An employee who is coverable at the beginning of a contribution period shall continue to remain covered until the end of that contribution period, regardless of the fact that his wages may exceed the prescribed wage ceiling at any time after the commencement of that contribution period.

The wage ceiling for the purpose of coverage is revised from time to time by the Central Govt. on the specific recommendation of the Corporation.

There is no rule for engaging piece-rate employees. All rules applicable for daily wage workers, contract workers, or regular workers, as the case may be, will be applicable for him. To motivate him, you can say that for each piece made, you will receive a certain amount as a commission. Under all circumstances, you have to provide the minimum wage, deduct PF, and pay ESI if applicable.

Can anyone please guide me on what the payment calculation will be for a piece-rated worker for '26 January,' i.e., a 1-day calculation for granted leave, where he is eligible for 'leave with payment'? I need the calculation criteria and method. Please advise.

I need to know if a piece-rate employee is covered under the Bonus Act.

Dear Sir,

I am working in a manufacturing unit where most of the work is on a piece-rate basis. Here in Himachal, the minimum wage is Rs. 6750 per month. While checking contractor compliance, they submit PF at the rate of Rs. 6000. Is this non-compliance? Kindly confirm or clarify the ultimate liability of submitting PF and ESI if the contractor has not submitted.

Thank you.