How Can Casual Laborers Access ESI Benefits Without a Contractor's Help?

Hello Everybody,

I'm working as Manager HR in a Boutique Hotel (a 5-star property), which is registered under the Shops & Commercial Establishments Act. Other than regular employees (for whom we have got the ESI Smart Cards made), we also hire some daily labor for construction/renovation work. These are not hired through any contractor, but their ESI, etc., is duly deducted and deposited in the bank.

My query is how can these casual laborers be registered in the absence of any contractors, and in case of any medical emergency, how can these casual laborers avail of ESI facilities?

You can bring them under your ESI Code by sending declaration forms. They will get insurance numbers and ID cards (smart cards also) and will be eligible for all benefits as per the Act. Since they are casual employees, their names will not appear in your payroll. Therefore, separate challans will have to be prepared for remitting their ESI amounts. In the Half-Yearly returns, you can show them separately.

Regards,
Madhu.T.K

During the process of filling up the ESIC online declaration form, there are two options available: either through a contractor or directly. Could you please advise on which option we should choose?

Thank you.

They are direct employees and not contract employees. Therefore, fill the status as directly employed. It does not mean that they are regular employees, and by showing them as direct employees, they will not come under your payroll.

Regards,
Madhu.T.K

Dear group member,

The first thing is that you cannot hire contract labor (for more than 20 days) without a contractor, and they must have a license as per the CLR&A Act. If you are hiring contract labor through a contractor, you can still deposit their contributions into the principal employer ESI A/C by mentioning in the challan which activity is being carried out (e.g., cleaning and sweeping job). If you are not going to have any contractor, then the Workmen's Compensation Act may be applicable rather than ESI if the work is not perennial in nature.

I hope this information will be useful for you.

Regards,
Trapti Sachan

Hey, I want to ask if these casual laborers would leave the premises after some period, then what would be the situation?

Handling ESI Contributions for Casual Laborers

Simple: When the casuals leave, stop paying contributions and reflect it in the returns. If sufficient contributions (78 days) have been paid in respect of them during the contribution period, they will continue to receive benefits until the benefit period ends. They can also choose to continue contributing with another employer they join after leaving your establishment.

Regards,
Madhu.T.K

Clarification on ESI and PF for Casual Employees

I want a clarification in this thread. I engage some people for the preparation of food, sweets, cleaning, servicing, and other related work. They are not regular employees, and I engage those who are available at the time of my requirement. They typically work for 8 to 10 days a month, and in almost all cases, no one works more than 50 days in a year. They are paid a good amount, ranging from 700 to 2000, depending on their skill or specialization.

If a casual employee works for 10 days, he will earn 7000 (for example). If his monthly salary crosses 15000, which is above the ESI and PF limit, do we have to deduct ESI and PF? If the answer is yes or no, please clarify why it is so.

Regards

In such cases, the coverage will be decided by the notional wages (the wages that the employee would have earned had they been employed for the entire month, i.e., daily wage multiplied by 26). Since the notional wages are more than Rs 15,000, you can exclude such employees from ESI coverage. ESIC has issued a specific notification in this regard; however, PF has not released any such notification.

Madhu.T.K

Good morning, sir. I have noted the contents of your reply and thank you very much for the same. Regarding PF, I will try to meet some officials in my place, and we will revert in this thread.