Are We Eligible for ESI and PF? Urgent Help Needed for Our Small Company

Hello everyone, I joined a company in August 2014 as an HR Manager. The company started in June 2014, and we currently have a staff of 20 employees, with 15 earning 15k per month or less. Salaries are paid through bank accounts.

Eligibility for ESI and PF

1. Kindly help me determine if we are eligible for ESI, PF, or anything else.
2. We have not yet applied for ESI; is there a mistake in this?
3. What are the eligibility criteria for ESI? Are we eligible?

Please assist me as this is urgent.

Regards

Dear Poojasingh08july, I am sorry to say that when you mention that you joined as an HR Manager, you are expected to have a basic understanding of the applicable labor laws. Although the applicability of PF and ESI has been discussed in this forum on numerous occasions, I would like to take this opportunity to address your query as follows:

Regarding PF:

The PF Act applies when you have a total of 20 headcounts, including contractors' employees, regardless of any salary limit, from the date you reach 20 headcounts.

Regarding ESI:

If you are not in Maharashtra, Assam, and HP, the ESI Act applies when you have a total of 10 or more headcounts, including contractors' employees, regardless of any salary limit, from the date you reach 10 or more headcounts. However, the scheme applies to employees earning a gross salary of not more than Rs. 15,000.

If you are in Maharashtra, Assam, and HP, the ESI Act is applicable as follows:

i. If you are a factory: when you have a total of 10 or more headcounts, including contractors' employees, regardless of any salary limit, from the date you reach 10 or more headcounts. However, the scheme applies to employees earning a gross salary of not more than Rs. 15,000; and

ii. If you are not a factory: when you have a total of 20 or more coverable employees, including contractors' employees. Coverable employees are those earning a gross salary of not more than Rs. 15,000.

ESI is applicable only in ESI-implemented areas.

To better understand the concepts of establishment, factory, branches, departments, etc., please research this forum or refer to the relevant Acts and other books on the subject.

Coverage Under the ESI Act, 1948

Regarding coverage under the ESI Act, 1948, your unit will be covered or coverable from the date it employs 10 or more persons, including contractor employees. As an HR representative responsible for ESI coverage, you need to contact the appropriate authorities in the area or follow the online procedure as mandated. In the Hyderabad area, shops, hotels, restaurants, etc., are coverable if they have 10 or more persons, including contractor employees, based on section 1(5) of the said Act.

Coverage Under the EPF & MP Act, 1952

In respect of the EPF & MP Act, 1952, the unit is coverable or covered from the date it employs 20 or more persons, including contractor employees. To obtain coverage, it is advisable to contact the appropriate authority of EPFO.

The persons or employees earning wages exceeding Rs. 15,000 will also be considered to reach the 10 or 20 threshold in the above Acts, but contributions will only be payable for employees within the coverage limit.

The employer will need to ensure compliance from the aforementioned dates, which includes the imposition of interest and damages for delayed contribution deposits under the Acts mentioned. There is no infancy or qualifying period for coverage under the aforementioned Acts.