Navigating ESI Deductions: Do Employees in Non-ESI Areas Still Contribute?

ESI Deduction for Employees in Non-ESI Areas

A factory is located in an ESI-implemented area. It has to send some employees to an area (for a permanent nature of job) where there is no ESI, although the payroll is generated from the mother factory. Will the deduction of ESI be mandatory for the employees sent for working in the non-ESI area?

Regards,
NKT

As per my understanding, you may continue with the ESIC till September, and then you would need to take a WC policy as they are going to work where the ESIC is not applicable. Nevertheless, please wait for some more replies from the seniors.

Regards,
Hardik

ESI Contribution for Employees Transferred to Non-ESI Areas

If the transfer is for at least seven months, you may stop contributing. This means an employee working in a non-implemented area of an establishment covered by ESI need not contribute, provided their stay away from the ESI-implemented area is for more than seven months in a year. Whether they should continue to contribute until the contribution period ends is a matter to be checked because this provision applies to those who become out of coverage due to an increase in their salary beyond the ceiling, i.e., Rs. 15,000. Therefore, you may seek advice from the ESI Corporation itself.

Regards,
Madhu.T.K