Facing ESI Non-Registration Issues: What Are the Consequences and Next Steps?

I am working for a construction company, and as soon as I joined, I informed my management about registering with ESI, but they have not done so. Now, ESI has issued summons for registration. In this case, please enlighten me about the consequences of non-registration.

Consequences of Non-Registration with ESI

1. From when will ESI collect the amount, penalty, and damage calculation?
2. Some of the employees have left. Do we have to pay the former employees as well? If so, under which section, and do we have to pay penalties and interest to these employees?

Please let me know.

Your establishment will be covered as a "shop" by the ESIC from the date the minimum number of employees required are employed in your office. The establishment will be required to deposit the contribution from the date it is covered by ESIC after verification of records. If covered from any retrospective date, interest will also be payable on such delayed payments of contributions.

If there are remaining employees on or from the date of coverage, the employer will be required to pay contributions for all remaining employees. Even in the case of coverage from a retrospective date, the employer is not entitled to recover contributions from the wages of current employees. The employer is required to bear the payment of all such contributions and interest.

For more detailed information, please consult the ESI Act, 1948, and the rules/regulations framed thereunder. The same can be downloaded from the website of ESIC Headquarters/Regional Office.

Harsh Kumar ji has given the right answer to you. You have not provided details of your employees. How many are there in your office, and how many are at your construction sites? What are their gross monthly emoluments? On what date did you reach 10 employees in your office?

Your liability will depend on the information above, and you need to work it out yourself to minimize your liability. Otherwise, the corporation will calculate your liability based on balance sheet figures and other available records for the inspector.