Are We Required to Comply with ESIC Coverage for Our Small Firm in Delhi and Gurgaon?

We are a Proprietorship Firm registered under the Shops and Establishments Act with 8 employees at our Delhi Head Office and 6 employees at our Gurgaon Branch. Could you please clarify if we are covered under the ESIC Act, specifically under section 1(5) or 2(9)? We seek your assistance as the ESIC Department has mandated us to comply with the coverage requirements.

Thank you for your guidance.

Regards,
M.K. Maharaj

The ESIC Act is applicable to all factories employing 10 or more workers. Its applicability for Shops & Commercial Establishments may vary from state to state. For instance, in Maharashtra, it is applicable when there are 20 or more workers. This includes all employees, whether they are at different locations or the same location, and whose salary is less than or equal to Rs 15,000.

Therefore, please check the State Government notifications for both Delhi and Gurgaon. If the ESIC authorities are demanding coverage, they should have some notification to prove it as well. I also request you to upload the same for the benefit of the HR community.

Regards

Thank you for your response. We have already checked the state government notification, and the notification is applicable to us since 1st April 2011 if we have 10 or more employees under one state. The ESIC Department is demanding coverage based on their revenue manual (attached for your reference). They have advised us to be covered from 1st April 2011 after combining our Branch office employees.

Is this correct? Awaiting your fresh view.

Thanking you in anticipation,

Regards,
M.K. Maharaj

In your case, they are correct as per the manual since your Head Office is in an implemented area while the branch office may or may not be in an exempted area. Therefore, it is covered.

Regards,