Starting a New Embroidery Division in Tamil Nadu: Do I Need to Register for IF, ESI, and PF?

Starting a New Embroidery Division in Tamil Nadu

I am currently working in Tamil Nadu in a garment manufacturing unit. We are planning to start a sub-unit, specifically an embroidery division. Currently, there are only 5 employees working.

Registration Requirements for IF, ESI, and PF

My question is, do I need to register with IF, ESI, and PF? I am aware that a factory with more than 10 or 20 employees is required to register for IF, ESI, and PF.

Next Steps and Legal Compliance

What steps should I take next? Are there any laws that could impact the operation of the factory? I would also appreciate any legal suggestions to ensure compliance.

Looking forward to your valuable suggestions.

Thanks & Regards,
Naveen R.

1. The PF Act is applicable if a company has 20 or more employees.
2. ESIC is applicable to a factory with 10 or more employees (coverage applies to those earning less than ₹15,000 per month).

Regards,
Vikram Trivedi
Labour Law Consultant
[Phone Number Removed For Privacy Reasons]

My answer to your query is as follows: You need to choose the right one among mine versus others.

Regarding PF

It is applicable when you have 20 or more employees (headcounts), including contractors, in all your units/branches/departments.

Regarding ESIS

It is applicable when you have 10 or more employees (headcounts), including contractors, in all your units/branches/departments.

Regards

PF Limit and Employee Definition

"PF limit of 20 employees includes contractors, employees? I was not aware of that. I think the definition of an employee does not include contract employees."

Please note the corrections made to the spelling, grammar, and punctuation. The paragraphs are now properly formatted with a single line break between each one. The original meaning and tone of the text have been preserved.

Thank you for your involvement. We have a unit with 100 employees, and now we are planning to start a new unit with 5 employees. Do I need to register with ESI or PF for the 5 employees, considering we already have 100 employees in the main unit? My doubt is about the calculation of heads. Does it include the main unit? If it does, there is no doubt I should register with both. This is what I am asking.

Thanks & Regards,
Naveen R.

I am not sure about ESIC, but PF is definitely applicable as the total number of employees is counted for the company as a whole. If you had given this information at the start, it would have saved a lot of people their time and efforts answering a point that was not there.

Dear Saswatha, sorry for the mistake. I will correct it hereafter. Now, my doubt is, should I register with PF for 5 employees or not? Should I bring them under my main factory account for PF itself? This is because there is an 8 km distance between my main factory unit and subunit.

I am expecting your good suggestion.

Thanks & Regards,
Naveen R

I am not conversant with the actual procedure, but from what the act says, you can have a single code for the entire country. Employers take a separate code for other states and sometimes for other factories for administrative convenience. The PF officer can ask for proof of compliance. If you have a single code for different factories in other states, copies of entire compliance records and registers need to be sent to all factories. With your factory being 10 km away, you can invite the officer to the first factory where the records are kept or send it over in 15 minutes.

Compliance and documentation have become easier now since records are online. So continue with your existing code. Don't take another one.

I tried to find out what the real procedure we are using is, so I went to the ESI Office and asked what I have to do to start a subunit. They told me that I have to register and get a subcode for the new unit. Finally, I found the way. Thanks for the guidance.

Kind regards