Counting Directors for PF and ESIC Registration: Do They Count as Employees?

Hello Friends, as our firm has now crossed a count of 20, we are in the process of registering for PF and ESIC. I would like to clarify whether the Directors of the firm should be considered in the count of employees for PF and ESIC registration.

I appreciate your prompt response. Thank you.

Regards,
Salloni

Hi Salloni, If directors receive a salary from your company's account, you have to include them in the count. This means that if they are on the company's payroll, they will be eligible for PF. ESIC is paid to those whose monthly gross is equal to or less than INR 15,000. Please let me know if further clarification is required. Thank you.

As per the law, if the number of employees exceeds 20, you are required to register under the PF/ESI Act. Regardless of the nature of duties performed by the employees, if you are paying their salaries/wages from the employer roles (not under the Contractual Labor Act), you must include them in the registration.

For assistance with the forms and procedures, feel free to contact me. I will help you without any charges.

Regards,
Lakshmi
[Phone Number Removed For Privacy Reasons]

Dear Salloni, Please refer to my previous email. As I mentioned, as per the ACT, PF is not covered for Directors of the Company, whereas Professional Tax is covered for each director who is a sitting director. You will need to remit a maximum of ₹200 every month for sitting directors.

Regards,
Venkat
Bangalore
[Phone Number Removed For Privacy Reasons]

Director's Role in Employee Count for PF and ESIC

If the director is only on the board, he is not considered. But if he is working and drawing a salary (not profit share), he is counted as 'persons' for the magic number of 20 for coverage of the establishment.

Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]

For counting heads, you have to consider Directors as well – those who are working in the company and receiving a salary for their work, whether they are receiving profit sharing or not. Additionally, you must deduct and pay the ESIC or PF contributions from their salary.

Regards,
Mallikarjun
[Phone Number Removed For Privacy Reasons]