Is Our Startup Really Exempt from ESI Due to No Nearby Dispensary? Seeking Clarity

Dear All,

We are a new startup at a special economic zone. The SEZ authorities are saying that the area is not covered under ESI since there is no ESI dispensary within a radius of 7 km. Is it true? Is it mentioned anywhere in the ESI act?

With regards,
M. Mahesh Kumar

Dear Friend,

The applicability of establishment under ESIC depends on the coverage of the establishment in the ESIC Zone. Please contact the ESIC Inspector near the branch office for further information. There is no provision in ESIC regarding distance concerns.

With Regards,
Naresh

Dear Mahesh,

Your question is one of the best questions related to the ESI, i.e., why many members have seen your post but none of them have replied.

I will try to clarify your doubt:

i. You cannot say that any factory/establishment/area is not applicable with the reason that there is no ESI dispensary within 7 or 8 km of it.

ii. Generally, it is an internal issue of providing an ESI dispensary or any other mode of medical care center like a Panel Doctor system within an 8 km radius of the industrial population of an implemented area.

iii. Before implementing any area, ESI will look into all these aspects, such as the number of factories/units and the number of employees who are coverable employees and what medical infrastructure needs to be made available to such insurable employees after implementing that area.

iv. After coming to one conclusion only, i.e., after providing better medical facilities either way, i.e., providing a Panel system or attaching such employees to the nearest dispensary (irrespective of the distance), the scheme will be implemented in the new areas.

With this background, you can conclude that the distance between the ESI dispensary and your unit does not make any sense for the coverage of your unit under the ESI Act. The only thing you have to confirm is WHETHER YOUR UNIT IS IN AN IMPLEMENTED AREA OR NOT. If it is in an implemented area, it is better to register voluntarily immediately; otherwise, you will have to pay the contribution, including THE INTEREST amount also.

If any ESI dispensary is not available nearby, please represent to your Regional Office to open a new Dispensary.

I hope all your doubts are cleared!

All the best...

V.S.P.

Thank you very much, Mr. V.S.P.

Our factory is not located in an area where ESI is implemented. In this case, do I still need to avail of insurance facilities as per the W.C. Act?

With regards,
M. Mahesh Kumar

Yes, you have to comply with the provisions of the Workmen's Compensation Act. To enhance the security for your employees, it would be advisable to consider providing Group Insurance to your workers.

All the best.

Dear Mr. V.S.P,

I deposited ESI contributions for the month of July 2010, dated 20/07/2010, in SBI through a check. However, SBI provided me with a challan copy stamped with the date 22/07/2010. According to ESI, there is a one-day delay, but the check was cleared on 21/07/2010, and the amount was also transferred to the ESIC account.

My question is, is this delay acceptable? Is one day of interest compulsory in this case?

Regards,
Sushil

Dear Sushil,

If the date of deposit and date of clearance of the cheque differ from one another:

i. For interest purposes, the date of credit of that amount to the ESI Account will be taken into consideration.

ii. For reckoning the damages, the date of deposit of the cheque will be considered if the cheque was honored.

Hope I clarified your doubt.

All the best.

Dear Mr. Syamprasad,

There is no provision in the ESI Act for taking the date of deposit of the cheque for claiming damages under Section 85(B) of the Act. The date of clearance of the cheque into the credit of ESI Fund A/c No. I is the criteria for the calculation of both interest and damages.

Regards,
Sanagapalli VR
Asst. Director (Retd)
ESI Corporation

Dear Sir,

We are a contract logistics firm with a client in Sree city. Currently, we are providing insurance coverage for employees only, and they are also in need of coverage for their families.

I would like to inquire whether the Employee State Insurance (ESI) is applicable to them, considering there is no ESI dispensary within the radius. If it is applicable, could you please provide information on the registration procedure for ESI?

Thank you.