Are Contract Laborers at Our Cinema Covered by ESIC? Seeking Guidance on Employer Liability

Dear Seniors,

Greetings of the day!!

I have a query. We have a multiplex (Cinema) in Rajasthan that is covered under PF and ESIC. Currently, we have employed three contracted laborers through an agency that provides labor for cinema operation. The agency is not covered under ESIC as it does not have 10 employees.

ESIC Coverage for Contract Laborers

In this case, do the said contract laborers need to be covered under ESIC or not? Is there any liability as the principal employer until the contractor has 10 employees? Kindly suggest.

Regards,

Regarding the coverage of contract employees, these workers are not on your payroll. Additionally, while the contractor may be providing you with 10 employees, the total strength of that contractor in terms of employees is likely to be more than 20. Logically, this means that the contractor has to apply for an ESIC code and cover all employees wherever they have contracts.

Principal Employer's Liability

Now, addressing your question as a principal employer, in the event of an accident during the course of employment within your premises or while on outdoor duty, you may be questioned by the compliance officer. This case would fall under the purview of the Workmen's Compensation Act.

Dear Sir, Thank you for your valuable comments. I know that the ESI Act applies to any premises or precincts where 10 or more persons are employed. Currently, our facility is covered under ESIC, but the contractor is relatively new and only has a PF code since he is providing manpower in various districts of Rajasthan, which are not ESIC-covered areas. In Jaipur, where our facility is located, the contractor has only 5 employees. I would like to inquire whether the contractor needs to register for ESIC now or later on when he employs 10 workmen. Your suggestions on this matter would be greatly appreciated. Thank you.

Hi Rajesh, as you mentioned, there are some zones that do not fall under ESIC applicability. In such cases, the workman's compensation procedure should be followed. I recommend having a detailed interaction with the contractor to understand how they will handle the situation in case of an accident on the premises of your facility.

Thank you.