Navigating ESI Registration: Do We Start Now or Wait Until We Have 20 Employees?

Dear Sirs, We are contractors employing 15 people and have been providing PF benefits to them for over 2 years. Now, we anticipate our workforce to exceed 20 and wish to register with ESI as well.

Registration with ESI

Could we register with the existing 15 employees, or must we do so once our headcount goes above 20? If we register now, are we required to pay ESI contributions for the previous 2 years (the period during which we started offering PF), or will the payment commence from the following month?

Your clarification on these matters would be greatly appreciated.

Thank you.

To clarify, you have to pay ESIC for 21 members. There is no need to pay ESIC contributions for the past two years, but you must make an advance payment for employees for three months.

Thank you, sir. If we have 21 members and 15 of them are working in ESI non-implemented areas, are we eligible to get the code from ESI? If we get it, do we have to pay ESI for the entire 21 employees or only those 6 people working in ESI implemented areas?

Thanks again,

Regards, Vijayasaravanan. S

According to the PF Act, if your employees are twenty or more, you must be covered under the Act, deduct their monthly contribution, and deposit the same along with the official contribution. The same applies to ESI as well. There is no harm in covering your employees if they are below 20. On the contrary, it is a very commendable behavior as an employer.

But what stopped you from covering your employees under ESI? Are your contract employees working on a project manufacturing site? Please consult the local office manager of the ESI and get the necessary things done. If you had covered your employees under ESI, then all their health-related problems would have been taken care of by the ESI dispensary or hospital. Anyways, it is never too late. Please act fast.

To register with ESI, they require 20 people employed in an ESI-implemented area. However, I only have 6 people working in the implemented area, and 15 are working in a non-implemented area. How can I obtain the code? Please help.

Hello, regarding the number of employees, I would always suggest that you cover your contract employees once the number crosses 10. In that case, all health-related problems would be taken care of by ESI, regardless of the number, and you as an employer are saved from any problems arising from health issues. The contribution is very meager and small, but it speaks volumes about you as a good employer, and consequently, the health of the contract employees is taken care of.

There is nothing like an ESI implemented or non-implemented area. It is basically about the availability of the ESI dispensary or health center in the vicinity of the working area. Please discuss the same with the local office manager and convey to him that irrespective of the number of employees, you want all your contract employees to be covered under the act.

In areas where there is no ESI, then WCA comes into force automatically. However, WCA is not as effective as ESI. To find a solution to your problem, you can also discuss with the officials of Panchdeep Bhawan, the ESI HQ. Contract employees are the most neglected. The act itself speaks of the abolition and regulation of contract labor. So, I would advise you to discuss the same with senior ESI officials in your working area and find a solution.

The problem is that I have only three people working in the implemented area. Our consultant asks for ten people to work in the implemented area before ESI registration is possible.

I have a doubt: is it necessary to obtain a new ESI code for contract workers? Will any problems arise in the future if we include the contributions of contract workers along with permanent employees?

Thank you.

If you are the principal employer, you can ask your contractor to apply for the ESI code and deposit the contribution using that code. However, if you are a contractor and already have a code number, you can deposit the contribution using that number. It is the duty of your contractor to obtain a code number and deposit the contribution, but the ultimate responsibility lies with the principal employer since the contract employees are working on their premises.