How Can I Implement Payroll and Compliance Systems in a Small Fabrication Company?

Implementing Payroll and Compliance Systems in a Small Fabrication Company

Recently, I have joined a fabrication company where five employees are currently working. Up to this point, there has been no payroll process in place, nor have EPF or ESI been implemented. I am keen on introducing a payroll process and incorporating EPF and ESI systems.

According to EPF regulations, it is mandated for companies with more than 10 employees; however, we currently only have five employees. Despite this, EPF, ESI, and Professional Tax are still applicable to my company. I am seeking valuable suggestions from senior colleagues on how best to proceed.

Thank you.

Applicability of PF and ESIC

PF is applicable if you have more than 19 employees. ESIC is applicable if you have 20 employees (10 in some states). So, why do you necessarily want to implement what is not yet applicable to your company? Both the employer and employee would be happier without the deduction and the additional cost.

The ESI & PF Laws are mandatory where more than 20 employees are working (for non-power-using units) and 10 employees where power is being used. However, if you want to register your employees voluntarily, there is no harm. You can register with the department voluntarily. Seek the help of a PF & ESI consultant near you.