Understanding the ESI Notification and Workmen Compensation Wage Changes: What Do They Mean for Us?

Dear All,

Please find enclosed the notification copies.

Thank you.

We are one of the telecom service provider companies engaged in installation and commissioning works in Andhra Pradesh. We have insured all our employees under the ESIC Act. Our customers, such as Ericsson, Vodafone, Nokia, Idea, etc., allocate installation works on a day-to-day basis at different sites spread throughout the entire state of Andhra Pradesh, specifically at cell phone sites. To carry out these tasks, our employees need to travel extensively from Hyderabad to various sites.

We would like to request clarification on whether ESIC insurance coverage applies to employees in the event of an accident while they are traveling to different places (sites). It should be noted that traveling is an integral part of the job performed by all our employees. Kindly arrange to provide us with the above clarification at your earliest convenience.

Dear Friends,

I have certain questions... if anyone can help me with this.

1) Are drivers hired for staff transportation covered under WC Policy?
2) Under which rule do Security Guards in the company fall? Is there any law related to this?
3) What are the Zones under which any MIDC area is divided?

Regards,
Punam

I would like to know if we have a total employee strength of 95 individuals and out of these 95 employees, only 10 are receiving a salary below 15,000/-. Do we need to take ESI registration for these 10 employees, or are we exempted? My understanding was that we need to have 20 employees falling below the salary limit of 15,000/- in order to be required to register.

Thank you,
Krishan Kapoor

Dear Mr. Bharani Kumar,

Accident-related benefits, by way of death benefit (Pension) and disability pension, are available in case of any accident while on duty travel anywhere. When employees are sent on such duty, please keep a record like an internal order requiring him to go on duty, ensure he is given normal traveling and daily allowance, etc., as per company rules, and preferably ensure that he has the identity card of his company and the order or company requiring him to do this duty or any other document such as an installation report, etc. In case of a serious accident, file an FIR at the nearest Police Station. If he is allowed to travel in his own vehicle for which a Traveling allowance is paid, record this in the internal order/memo, etc. In case of any accident on duty, submit an accident report in form and if the form is not available, use a plain paper report, followed by Form 16, to the nearest Branch Office of ESIC. For treatment in any hospital, including a private hospital in such an emergency, submit all bills and claim the expenses separately. If he has to take leave, on the recommendation of any doctor in such an emergency, submit such a certificate separately for leave benefits, which are at a higher rate for accidents. Hence, in such a case, he will receive disability pension or death benefit in case of death by way of a lifelong pension, leave benefits during treatment, reimbursement of medical expenses even in a private hospital in case of emergency treatment, and additionally, the funeral benefit. Advise all employees accordingly.

O. Abdul Hameed
Formerly Additional Commissioner
ESI Corporation
Email: oahamid@yahoo.com

Dear Mr. Kapoor,

I would like to know if we have a total employee strength of 95. Out of these 95 employees, only 10 are receiving salaries below 15,000/-. Do we need to obtain ESI registration for these 10 employees, or are we exempt? I was under the impression that we would need to register only if we have 20 employees falling below the 15,000/- limit.

Thank you,
Krishan Kapoor

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Till recently, only the number of employees drawing wages at or above the prescribed limit was required to be counted for determining coverage, following the SC judgement in the Suri Case. However, the ESI Act has been amended this year (applicable from April or so), whereby all employees, regardless of their wages, must be considered for determining coverage (10 in the case of manufacturing units and 20 for shops, transport, newspaper establishments, etc.).

O. Abdul Hameed
Formerly Addl. Commissioner, ESIC

I do not understand the workmen's compensation notification. Please explain the effects of this notification on private limited and limited companies, as well as other private sector industries.

Thank you.

Punam,

Drivers should also be covered by the WC policy. In any case of an accident, if no policy is in place, the employer will have to settle any Workers' Compensation claims directly. If you are covered by the ESI scheme, then the WC act will not apply, and all compensation for accidents, disabilities, deaths, sickness, etc., will be paid by the ESI Corporation. Security guards should also be covered under all labor laws if they are working on your premises, or you should ensure that the agency providing the guards is covered by EPF, ESI, etc., and is paying the minimum wage.

In other words, you cannot avoid labor laws and social security protection for employees working within your premises just because they are engaged through a contractor.

O. Abdul Hameed
Formerly Additional Commissioner ESIC
Email: [oahamid@yahoo.com](mailto:oahamid@yahoo.com)

Hello Abdul sir,

Thank you very much for your information on ESI & WC Policy. It was very precise and cleared a lot of doubts on the above. Once again, thank you very much.

Sree

Respected friends,

Kindly advise me whether the appropriate State Government (in this case, the Government of Tamil Nadu) or the central government has extended the provisions of the ESI Act to certain specific classes of establishments such as shops and establishments employing 20 or more persons. Kindly advise with reference to the state of Tamil Nadu because my friend has an office in Chennai employing 20 laborers. It is not a factory, only an office.

I will be grateful for your advice.

Regards,
Sr. Laksminarasimman

Respected friends,

Kindly advise me whether the State Government of Tamil Nadu or the Central Government has extended the provisions of the ESI Act to shops, establishments, and offices in Tamil Nadu. My friend has started an office in Chennai in July 2010 employing 20 persons with a salary below Rs 10,000 per month. If applicable, please provide the notification number.

With regards,
Sr. Laksminarasimman

Dear Mr. Kapoor,

Till recently, only the number of employees drawing wages of the prescribed limit or above was required to be counted for deciding coverage due to the SC judgment in the Suri Case. However, the ESI Act has been amended this year (applicable from April or so), by which all employees, irrespective of their wages, need to be taken into account for deciding coverage (10 in the case of manufacturing units and 20 for shops, transport, newspapers, establishments, etc.).

O. Abdul Hameed Formerly Addl. Commissioner ESIC

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Dear Hamid Sir,

As you mentioned, we had approached the ESI authorities in Chennai for the coverage of our establishment, which is involved in mobile tower supply and erection business (16 persons were drawing salaries less than 15001/- pm, whereas the total strength was 76). However, they stated that our establishment cannot be covered as the number of coverable employees was below 20. Additionally, they mentioned that the said amendment was applicable only to factories and not to establishments. Is this true?

Furthermore, they indicated that since mobile tower erection is not confined to a particular location and is analogous to civil construction work, only the count of office staff would be considered for the purpose of coverage, and not the field technicians/field engineers. As a result, they rejected the application.

I have reviewed the Act, its rules, and regulations. However, I am unable to find any clause supporting their contention. Your clarification would be immensely helpful to me. Thank you.

Ramesh

Hello,

The State Government of Tamil Nadu issued a notification under section 1 (5) of the ESI Act several years ago, around 1977, covering shops employing 20 or more persons in specified and notified areas. The entire Chennai area is notified. Please send the registration form to the Regional Office at Sterling Road.

Best regards,
O. Abdul Hameed
Former Additional Commissioner, ESIC

Dear Ashok,

The Workmen's Compensation Act is applicable to those sectors where ESI is not applicable or to those employees who are not covered under any medical scheme. You can refer to the Workmen's Compensation Act of 1923 for better understanding.

Kind regards,
Yogesh Jalota

I express my thanks to Mr. Hamid for his clarifications. We are very fortunate to have Mr. Hamid as a member of our citehr community. His clarifications on the applicability and other provisions of the ESI Act have enriched our professional knowledge. Like Mr. Swaminathan, I also expect that Mr. Hamid will continue giving his valuable guidance and clarification on matters relating to the ESI Act to our community members as he is an expert on the subject.

One more thing I want to bring to the notice of all community members is that there is no such Act entitled as the Workmen's Compensation Act now. It has been replaced by 'The Employee's Compensation Act' due to the recent amendment made in 2009. By virtue of this amendment, for the words "workman/workmen", wherever they occur in the Principal Act, the words "employee/employees" shall be substituted. This Act is applicable to all employees of factories, mines, shops, or industrial establishments, whether they are a Pvt Ltd. or Ltd. or Pvt. Sector organization, as detailed under Schedule II of the E.C. Act, provided the ESI Act is not applicable to it.

Further, as per the newly amended Act, the minimum compensation payable to an employee/legal heir of an employee (of a deceased employee) in case of an accident arising out of and/or in the course of employment are as follows:
i) In case of a fatal accident - Rs. 1.20 lakh
ii) In case of permanent total disablement - Rs. 1.40 lakhs
However, the lower the age of the injured employee, the higher the compensation amount at the same monthly wage rate. For example:
- The wage rate is Rs. 8000/- p.m. (this is the max monthly wage rate allowed vide the Central Govt. L&E Dept. notification dated 31.5.2010)
- Age (a) for Min. 18 years (an adult employee) at the time of the accident
- Factor as per Schedule IV of the Act - 226.38
- Amount of compensation payable - 8000 * 60% * 226.38 = Rs. 10,86,624.00
(b) for Max 58 years (normal retirement age)
- Factor as per Schedule IV of the Act - 124.70
- Amount of Compensation payable - 8000 * 60% * 124.70 = Rs. 5,98,560.00

S.K. Hota
Bhubaneswar (Orissa)

Dear Mr. Hameed,

Thank you very much, sir. I really appreciate the way you have clarified the issue for the benefit of me and the HR community.

Krishan Kapoor

Sir, I am from AP. I have only 11 employees, fewer than 15,000 in my office. It is an ITES company. Do you mean to say that I would have to register for ESI as per the SURI case judgment? I am extending United Insurance Health care support to them. Please let me know what the ESI Act says.

Gopi

ESI Notification of Rs. 15,000/- & Workmen Compensation Minimum Wage Amendment Rs. 8,000/-

Dear All,

Ours is a Security Agency providing manpower all over Maharashtra and operating from Kolhapur (Head Office). In some cases, we do not have a branch office, but the persons are employed. We have the ESIC code, but how can we obtain the Sub code without a branch office for the benefit of the employees.

Please guide me.

Regards,

AG P

Dear Mr. Patel,

Since your establishment is covered, all security guards and other employees (earning Rs. 15,000 per month or below), wherever they may be employed, are to be registered. However, those actually working in areas where the ESI scheme is not implemented for more than seven months in a year will be deemed exempted. Several rural areas are yet to be implemented, and you can get a list from the ESI office. You can keep a register for such persons showing the address of their workplace. For the rest of them, the nearest ESI branch office will be deemed their branch office. Please contact your Kolhapur ESI office, where I think an SRO may have opened, or in any case, there is a branch office.

Abdul Hameed
Formerly Addl Commissioner ESIC

Respected seniors, I am working in a manufacturing company. My boss demands anything related to ESI, PF, Bonus, etc., they demand government notices. Please send me the government notification regarding rounding off deductions in ESI and EPF.

Thank you very much for your information on ESI & WC Policy. However, I need to have one clarification, especially on drivers' coverage. Usually, every vehicle is covered with comprehensive insurance, where drivers are also included. Do we still need to take WC policy or ESI coverage for drivers?

Regards,
dabbeeru

Employee Accident Compensation Inquiry

One of my employees passed away in an accident that occurred on the company premises. His gross salary was more than Rs. 15,000 during his one year working with our company. As he was not covered by ESI, is the company responsible for any compensation or benefits for him or his family?

I am awaiting your appropriate guidance.

Regards

Dear Sir,

Please guide regarding ESIC exemption limit in Secunderabad, Andhra Pradesh.

Regards,
Hiten

Dear members,

The thread is more than six years old. A few changes have taken place in the ESI Act, and the limit is also being raised to Rs 21,000. Therefore, to avoid confusion, the thread is being closed.

Thanks,
Dinesh Divekar