Navigating ESI Benefits for Temporary Workers Across States: Is a Subcode Necessary?

Esi Benefits for Temporary Workers in Different States

Please advise that in case our company, which is in WB, gives a job contract to a company from another state, say Bangalore. The contractor has deployed a few workmen at our Kolkata factory for a temporary period, i.e., 30-45 days, to execute the job. The contractor has PF and ESI code registration against their registered address of the Bangalore office and does not possess any subcode. For PF, as no subcode is required, no problem arises. However, as per my knowledge, for availing ESI benefits, a subcode is required. This means that those workers who have been deployed at Kolkata (they have ESI registration under the head office code at Bangalore) will not be able to get ESI benefits unless a subcode is created, and they are transferred under the subcode.

The contractor is arguing that they are working in different other states and have not faced any problem in this regard. They claim that as those laborers are covered by ESI under the head office code, in case of any problem, they will be able to get benefits from any ESI hospital in other states, and a subcode is not required since ESI cards, like PF, are acceptable centrally.

Your advice, please.

Regards,
DG

Difference Between PF and ESI Benefits

There is a difference between PF and ESI with regard to the offering of benefits. Under EPF, there is no scope for employees frequently approaching EPFO for benefits, but under ESI, it is there.

Theoretically, with the entry of online facilities, there is no need for separate sub-codes for each local office. However, practically, since not all local offices and dispensaries are connected to the online system, we have to obtain sub-codes for each location. This means that the contractor (business house) in Bangalore has to acquire a sub-code in Calcutta and remit the amounts to this account to ensure that the employees engaged by him in Calcutta receive ESI benefits there. This process can be done online from the Bangalore office itself. Once the sub-code is generated, they can register the employees deployed in Calcutta under it and begin paying contributions. When they are in Calcutta, they can pay contributions into the Calcutta account, and once they are recalled, they can stop payments in the Calcutta sub-code and resume payments in Bangalore itself. This task is not overly burdensome. Moreover, insisting that the contractor pays contributions in Calcutta by creating a sub-code for Calcutta is beneficial for you as the Principal employer because it provides a separate and unique account for the employees deployed exclusively for you.

Regards,
Madhu.T.K