Understanding EPF and ESIC Coverage: What Are the Rules for Construction Workers and Small Contractors?

Dear All, I am working in a construction company.

EPF and ESIC Coverage During Construction

1. Sir, I want to know what is covered under the EPF and ESIC schemes during the construction period. Please clarify.

Contractor Obligations Under EPF and ESIC

2. If an establishment covered under EPF and ESIC has contractors who have deployed employees with a strength of less than 20, does it fall under PF/ESIC registration obligations?

Regards,
Pawan Khola

During the construction period or until the first sale, EPF and ESI will not be applicable. It will be applicable only from the date on which the number of employees exceeds the required minimum of 10/20 after the sale bill is raised.

A contractor who engages fewer than 20 employees will not be covered by EPF/ESI individually. However, since the establishment where the laborers are deployed is covered by ESI and EPF, the employees deployed there will be covered by ESI and EPF. If the contractor fails to register, the establishment, as the principal employer, is obligated to provide coverage to the employees engaged through the contractor. In such cases, the contractor's employees will be assigned PF account numbers and ESI code numbers in the same sequence as the direct employees of the establishment.

Regards,
Madhu.T.K

Since contract work does not utilize the power, if the number 20 is reached, a contractor is eligible to take the codes.

Dear All,

I am working in a precast house construction company. The company's contract will close within a short period (1-year contract period). We have 30 employees, and their salaries are also above 12,000/-. We only have casual staff, and we subcontract labor to another party.

EPF and ESIC Coverage During Construction

1. Sir, I want to know during the construction period what we are covered under EPF and ESIC schemes. Please clarify.

2. An establishment covered under EPF and ESIC includes contractors with deployed employee strength less than 20. Does it fall under PF/ESIC registration obligation?

3. For casual staff, do we need to take ESIC & EPF registration?

4. Our contract period is only one year. Is ESIC & EPF mandatory for this period?

5. We have taken an employee accident & health insurance policy. Is this sufficient for ESIC coverage?

Please clarify the above points.

Regards,
Sujeesh.K.S

Understanding EPF and ESIC Coverage in Construction

When your main area of business is construction, and you are constructing for others using your employees, the question of the construction period does not apply. It is applicable to the establishment for which you are building the factory structure, whereas for you, it is routine business. Therefore, you will come under the purview of ESI and EPF, and all employees whose monthly wages do not exceed Rs. 15,000 (now going to become Rs. 25,000) should be brought under ESI. For exemption, just medical insurance is not sufficient. You are also covered by PF, and those whose basic wages do not exceed Rs. 6,500 should be brought under PF as well. For this period of operation, it is immaterial, and you are subject to coverage even if your contract will come to an end in one year.

Regards,
Madhu.T.K