Contract Employees ESI Deduction

Dear Seniors,
We have appointed new Canteen Contractor who provides lunch for us daily. But he is not covered under ESI, He has got 4 employees how should i cover them under ESI scheme. i want the contribution deducted in his bill to be paid in those 4 employees name. I cant take them in my Company roll

Hi Friend
For 4 employees The contractor need not cover ESI, Since as per ESI ACT 10 or more employees working in a organization has to be covered under ESI.

If the main factory/establishment in which Mr.MUBASHIRA.S.M,is employed is covered or coverable under ESI Act, then the employees of Canteen even though engaged through any contractor are also to be covered and compliance made under said Act. The compliance is to be made as the compliance in respect of direct employees is made by the factory/establishment, though separate record can be maintained in respect of said canteen contractor.

Even if the factory/establishment is employing less than 10 persons, and if by adding 4 contractor employees, the total strength becomes 10 or more persons, the said factory/establishment qualifies for coverage under said Act and compliance is to be made.

In respect of compliance to be made under above Act and rules/regulations framed thereunder, there is no difference between direct/regular or casual or contractor employees. All are "employees" as defined under said Act provided their wages are upto wage limit as defined under Rules/Regulations framed under said Act.

Harsh Kumar Mehta.

Respected
Mr. MUBASHIRA.S.M,
greetings
As per act no need to cover for 4 employees but still you need them to be covered under the ESI for ESI benefits if this is the case
you can make that canteen contractor to be register under the ESI & then those 4 of them will covered & get the ESI benefits
for 10 or more workers its compulsory obligation for that employer/contractor below that also you can get register pay the EE & ER shares and get the befits from the ESIC.
now you can register online there after you can produce the the online generated C-11 form to the regional ESIC branch manager.
but with out registrations & paying shares to ESIC you can't deduct money from the contractor's bill with the ESI name.( you may know this but its a reminder point)

Dear Bala, Harsh & Ram.
Thanks for your immediate reply & sorry to say Am Ms Yaar not Mr.
We usually deduct 6.5% for our contractors who work for us for 2 or more hours or Max 1 or 2 days for example hamali work like loading unloading or painting & etc.
And pay the same amount as Misc or Labour Charges to ESI. In this case the amount deducted will be on bill Amount but the employees involved in the process will not get any benefit.
The problem is the canteen employees will work with us for whole month i just want the 4 employees involved in the process to get the benefits of ESI.

Dear Naziya,

First of all please confirm whether your establishment is coverable under the Act including these contract labour also. Secondly, check up whether the canteen contractor as an establishment is covered under the ESI Act. If the contractor is not, you may not be able to force him to register his establishment. However, as clarified by Mr. Harsh Kumar Mehta, after including the contract labour, part time hamals, etc., if your establishment falls under the coverage, please register your establishment under the Act and remit the ESI contributions of all employees including the contract labour. However, you may recover the employer and employee contributions from the respective contractors bills.

Once you cover under the Act, you have to remit the actual contributions as prescribed under the ESI Act and not as miscellaneous or labour charges, and comply with all other statutory requirements such as maintenance of documents and filing of Returns.

If the contractor's establishment is coverable taking all his employees deployed in his establishment and in other Firms on contract, you can insist on compliance under the ESI Act by him and seek documents thereof as a precondition of passing of bills.

With best wishes,

Guys,
if contractor has only 4 employees ,yu can talk to another contractor in ur company who can pay contributions for these 4 people,,
and yu can reimburse his bills for the same.
Regards,
Mahendran.I

When yu start paying contributions for those 4 people yu have the risk of givng them an oppurtunity to claim permanency .
When ESI is not an option try complying with Employees compensation Insurance available with many insurance companies.
Or you can cover them in personal accident policy or a mediclaim policy through the contractor and the same can be reimbursed in his bills,
Note: Insurance and mediclaim cannot be used as a substitute for a statutory compliance,but it solves the risk of accident and other compensation that employer has to shoulder responsibilities.
Regards,
Mahendran.I

Dear Friends,
Sorry to post my reply to this issue, if you really know the legal status and applicability of law then your most welcome, otherwise kindly don't give wrong opinion or statement for those who posted opinion. if have any doubt or question on applicable laws and provision ... kindly post your mail to: [Login to view]
Regards
Veda Legal Resources Pvt.Ltd
Veda Management Consultants
Veda Team

Mr .Veda,
We would want to know which of those opinion in wrong. so that it cud be ignored.
regards,
Mahendran.I