E.S.I. Coverage Dilemma: What Happens When Employees Are Sent on Deputation to Non-Covered Areas?

A friend has a factory in an area where the E.S.I. Act is applicable, and all the employees are covered employees. My client wants to send some of the covered employees on deputation for 3 months to a factory situated in a non-covered area. What is the provision regarding the coverage of the employees who are to be sent on deputation?

I understand that as the deputation to a non-implemented area is for less than seven months, they have to contribute to ESI, even though they will work in a non-implemented area for three months. For better understanding, it is advisable to contact the ESI Social Security Inspector.

Regards,
Madhu.T.K

Thank you for the advice. My point was that despite the fact that workers who are working in the non-coverage area, should I continue to pay the ESI contributions, or should I take the WC policy? The point is, if some mishap happens in the non-coverage area, ESI might refuse to extend the benefits under the act.

Workers' Compensation as an Alternative

You have to go for workers' compensation (WC) as an alternative immediately because, in WC, no name will appear. Whoever is transferred to non-coverage will be covered under WC.

Regards,
Calvin

In my opinion, it is better to pay contributions for those employees working in non-implementing areas for less than seven years. Alternatively, you can consult the area inspector for better advice.

Regards,
Kuldeep Sharma

You need to pay ESI contributions for those employees because, in case of any accident, they can benefit from the nearest ESI dispensary and also avail themselves of the cash benefit. In my opinion, you need to pay.

Thanks,
Sunil Sharma