Are Sister Companies Required to Register for ESI and Gratuity Like Their Parent Company?

Dear All, Please read the following and suggest:

Company Structure and Compliance Requirements

There are 5 companies in a group. There is 1 parent company to all, and the other 4 companies are subsidiaries/sister concerns of the parent company. Currently, the parent company is registered under PF, ESI, and Gratuity as it exceeds the required number of employees. The other companies, which are sister concerns, are not yet registered for PF, ESI, or Gratuity as the employee count in each company is less than 10.

Registration Requirements for Subsidiaries

From a PF perspective, all 4 other companies should be registered as they are sister concerns, and the parent company is already registered under PF. I would like to know if the same principle applies to ESI and Gratuity as well. Please guide.

Regards, DG

ESI and Gratuity Coverage for Multiple Units

It is the same in the case of ESI and Gratuity as well, where departments or branches will be considered together for coverage. However, if all the units have separate financial statements and file IT returns separately, they become independent units. Due to this reason, the other units may not fall under the purview of the ESI or Gratuity Act, provided they do not employ 10 employees.

Regards,
Madhu.T.K