Small Business Dilemma: Should We Offer PF or ESI Plans to Our Engineers?

Dear All, I am running a small organization in which 11-12 engineers are working. Should we apply for PF or ESI plans for them?

If an establishment employs 10 or more employees with salaries less than ₹15,000 per month, then the Act is applicable. Additionally, if there are 20 or more employees employed, regardless of their salaries, the Act is also applicable. For EPF inquiries, please contact the enforcement officer or Assistant Commissioner of your circle regarding voluntary registration. Both the employee and employer must agree, and there is a subsection inserted in the Act for voluntary contributions.

Thank you,

Regards,
Naresh Gadde
Hyderabad

I have said in a general sense that establishments employing 20 or more employees are covered under the ESI Act. However, Naresh Gadde has correctly stated that establishments employing 10 or more are covered under the ESI Act. Thanks, Naresh, for this. In light of this post by Mr. Naresh, I would like to address the issue of coverage under the ESI Act from a more proper perspective as follows:

Coverage Under the ESI Act

After the amendment of the ESI Act in 2010, factories employing 10 or more persons are now covered. Regarding establishments other than factories, the Central Government or the State Government can cover them by way of notification, specifying the minimum number of employees required for coverage under the Act. Thus, concerning establishments other than factories, they need to employ 20 or more persons to be covered under the ESI Act. However, to my knowledge, the Central Government and the Government of Gujarat issued notifications covering establishments other than factories in NCR and in Gujarat, respectively, even if they employ 10 or more persons now instead of the previous 20 or more persons. I am not aware of whether other State governments also followed this by issuing similar notifications.

Others may contribute to this discussion.

Regards,
B. Saikumar
Mumbai