Clarification on ESI Act Coverage Requirements
1. The remarks of Mr. Saswata Banerjee, stating "the first point is that ESI is not required when the company has more than 20 employees, but when it has more than 20 employees with a salary of less than ₹15,000 per month," appear to be incorrect in view of the current legal position. To attract the provisions of the ESI Act, 1948, the requirements are: (a) the unit (i.e., factory) must employ 10 or more persons, and (b) the said unit must be situated in an area that is an implemented area under section 1(3) of the said Act. Even if one person out of 10 such persons is earning wages up to ₹15,000, the unit will be coverable, and compliance is required under the said Act. Even in the Mumbai/Maharashtra area, where, as far as I know, the appropriate government has not reduced the coverage to 10 to 19 persons in respect of selected establishments under section 1(5), units under the category of "factory" are coverable as soon as they employ 10 or more persons under section 1(3) of the said Act. I hope Mr. Banerjee may kindly see the amendment in the said Act carried out in the year 2010 and may also guide me if I am wrong.
2. Similarly, I feel that the remarks of Sh. Gautam Dwivedi, as mentioned above, appear to be incorrect in view of the legal position as outlined in my submission above.
Role of Local ESIC Offices
3. Further, the Local Office of ESIC has nothing to do with the coverage or uncoverage of units under the said Act. The Local Office or Branch Offices of ESIC are concerned with the disbursement of cash benefits to the insured persons and their dependents and with the registration procedure of insured persons. If you have any issues of such kind, you can take up the matter with either the Regional Director/Joint Director (Incharge) of the Regional/Sub Office or the Social Security Officer of ESIC to the jurisdiction of which the concerned unit is situated.