It is not a subcode of the Principal employer that is allotted to the Contractor but a separate code itself is needed. But if the contractor himself is not covered by the ESI Act due to his employing less than ten/ twenty employees, as the case may be, there will not be separate ESI registration for the contractor. In such cases, the employees of contractor engaged in the Principal employer's establishment will be covered and ESI deducted from the amount paid/ payable to these employees and in the absence of separate registration for the contractor, enroll the employees of the contractor under the Principal employer and pay the contributions on behalf of the contractor. There is nothing wrong in covering the contract labour under the Principal employer and it is not mandatory that all contractor should have separate ESI code. Similar is the case with EPF also.
Regards,
Madhu.T.K