ESIC Contributions Dilemma: Do We Need to Pay for Non-Implemented Areas Too?

Dear Seniors, we are a fabrication contractor registered under the ESIC Act, working for companies situated in both implemented and non-implemented areas. Currently, we only contribute for employees working in the implemented areas. However, we are facing an issue as ESIC is now requesting us to also pay contributions for employees working in the non-implemented areas. Could you please confirm if this is correct?

Thank you.

I think you should have contested the payment of contributions in respect of employees working in non-implemented areas before the appropriate authority of ESIC. There must be some other facts or reasons on the basis of which ESIC has demanded contributions for employees working in non-implemented areas.

If your facts are clear as mentioned by you, you can represent your case to higher authorities or even take up the matter before the appropriate honorable E.I. Court.

Thank you for your message. I wish to know only one thing: whether I have to pay contributions for the employees working in non-implemented areas or not. If not, which section exempts the payment of contributions? During one inspection, an officer also mentioned that there is no need to pay contributions for non-implemented areas.

I would also like to bring to your attention that the monthly contribution template includes a reason available under code No.: 6 for zero contribution, labeled as "non-implemented area."

If I am required to pay contributions, what is the purpose of code No.: 6? Please assist me by providing the necessary details.

Thank you.

Exemption from ESIC Coverage for Non-Implemented Areas

If your workers are working in a non-implemented area for not less than seven months in a year, you can exempt them from coverage provided the State Government has given such exemption by notification following Section 88 of the ESI Act. In Kerala, a similar notification exempting employees working in a non-implemented area and touring employees who remain out of the implemented area for seven months and more is available. Please go through the attachment.

Regards,
Madhu.T.K

Normally, it will be the same all over India. However, please check with ESIC if such a notification is available.

Regards,
Madhu.T.K