Is ESI Needed for STPI Registered Non-IT Companies with Mediclaim Insurance?

Hi All,

I just want to get it clarified if ESI is applicable or not for STPI registered non-IT company. All employees are covered under a Mediclaim insurance policy.

Thanks,
Pallavi

Dear Ms. Pallavi ji,

The STPI is covered under PF & ESI as per the act. Before that, whether your establishment is registered under the Shops and Establishment Act? If so, it's automatically covered. For PF ceiling limit is Rs. 6,500/-(See the act) and ESI Rs. 10,000/-. For Provident Fund, if any employee crosses the limit, he will be called an exempted employee. Regarding ESI, if any employee's income exceeds Rs. 10,000/-, you need not cover it.

For further clarification, please refer to the act.

Regards,

PBS KUMAR

As far as I know, if ESIC will be applicable, then the S&E Act won't be applicable. Section 38-C of the Bombay Shops and Establishments Act, as well as the proviso to sub-section (1) of Section 2 of the Maternity Benefit Act, give power to the State Government to extend the application of the Maternity Benefit Act to women employees in any establishment or class of establishments.

Accordingly, the State Government has extended the application of the Maternity Benefit Act to all shops, commercial establishments, residential hotels, restaurants, and eating houses to which the Bombay Shops and Establishments Act applies. However, the Employees' State Insurance Act does not apply.

I am a newly opened software and website development company in Pune. I have already registered on this site, so do I need to register with STPI as well? What will be the consequences if I don't register?

Hi Pallavi,

Before going for the ESI & PF registration, first, you have to determine the size of your company in terms of the number of employees on your company's payroll. If your company is an IT company and has 10 or more employees, then you must register for ESI & PF. Additionally, there are other certificates required depending on the presence and existence of your company, such as the state in which your company is established.

For the registration formalities and relevant forms for both ESI & PF, you can refer to the respective acts available online. You can also access them through Google.

Regards,
Sidharth

I started a web designing office in my flat. I didn't register any office or STPI. Is there any problem with developing websites or software for clients? I have my own website. How?

Coverage of ESI is not necessarily based on the nature of the industry such as software or engineering, but on whether the establishment is set up in an area notified as covered or not. There are areas notified as not covered by ESI. Therefore, the first thing to ensure is whether any exemption is available in the respective area where the park is established. If it is an exempted area, then all firms in that area, regardless of being in software or not, will be exempted from ESI.

For EPF, no such exemption based on the area of operation will be available. All firms employing not fewer than 20 employees will be covered by EPF. The question of whether employees' salaries do not exceed Rs 6500 comes next. For EPF, although employees whose salary exceeds Rs 6500 are excluded, the establishment will still be covered.

Dear Drupad, You may interpret the Maternity Benefit Act as applicable to all establishments to which the Shops and Establishments Act (as well as the Factories or Plantations Labour Act) applies, but it does not apply to employees (women) covered by the ESI Act. This does not mean that the Maternity Benefit Act will not be applicable to employees of the establishment covered by the ESI Act. It implies that the benefits under the Maternity Benefit Act will be available only to women employees who do not receive maternity benefits from the ESI Corporation under the ESI Act.

Regards,
Madhu.T.K