Navigating ESI Requirements for Contract Workers in Areas Lacking Infrastructure: What Should We Do?

I'm working with a large manufacturing company in Orissa. The company is exempted from ESI for regular employees. For contract workers, we have a system of providing coverage through a Workmen Compensation Policy and have a dispensary to take care of their immediate health needs.

The company is located in a place that does not fall under the municipal limits of the nearest town and is in a village. The town has a small and insufficient setup of ESI infrastructure. In such a situation, is it necessary to have ESI registration for contract workers, or is ESI registration a must with or without ESI Infrastructure.

Friends, please help!

Regards,
Arvind Tiwari
Orissa

Hi,

As per my knowledge, you don't need to go for ESIC Registration. Please let me know how far your company is from the nearest town!

Dear Arvind,

If your industry is currently not covered under ESIC, the workers will be under the coverage of WC Act and MB Act. You can also get medical coverage through any insurance companies under these statutes. As and when ESIC covers your area by providing suitable infrastructure such as ESI Dispensary, your industry will come under the coverage, and you will have no option at that time but to be covered under ESI, which is statutory. Later, you will have to comply with all provisions of the ESIC Act.

If you have any further queries, please feel free to get back.

Harinder

Hi Arvind,

Thank you for the inputs, Harindra!

I just have one question and I would like some clarification. Is there a specific section in the ESI Act that defines the designated area for an ESI establishment? This information would be useful to have for our records to ensure that our practices, as per the WC Act, are not challenged in the future.

Thank you once again for your assistance.

Best regards,
Arvind

Dear Arvind,

There is no section, rule, or regulation under the ESI Act mentioning the area of coverage, but the provisions of the act will immediately apply soon after the area is covered with necessary infrastructure such as ESI Dispensary and Branch Office. In such a case, you need not cover your employees under the WC Act and should follow the provisions of the ESI Act, which will become mandatory.

Sorry for the delay in replying to your query.

Harindra

Dear Sir,

I am working with a company that has started deducting ESI contributions as per new norms. However, some of our staff have been deputed in areas for a new project that are not covered by ESI. Please let me know if we should take declarations from the staff and how one can benefit from this.

I am new to ESI applications, so any comments and advice from you are highly appreciated.

Thank you.

If you approach the Regional Office concerned, you can get a list of implemented areas in your state. If your area is not on that list, then there is no need to be covered under the ESI Act.

In addition to that, through the ESIC - Headquarters' Office, you can also see the list of non-implemented areas.

Thank you.