How Can We Resolve Unpaid ESI for Past Employees and Current Housekeeping Staff?

ESI Coverage for Past Employees

We are an IT company with 8 employees, and ESI is not applicable to any of them. However, in 2013, we had 2 employees who were eligible for ESI coverage, but it remains unpaid to date. How can we resolve this issue?

ESI Contributions for Housekeeping Staff

Since 2013, we have employed housekeeping staff through an agency who should have been covered under ESI. Unfortunately, the agency refuses to pay ESI contributions and is unwilling to register. As the principal employer, we are now responsible for their ESI contributions. How should we address this situation and make the necessary payments for the housekeeping staff?

Thank you.

Employee Count and ESI Applicability

Currently, you have 8 employees. What was the total number of employees in 2013? The ESI Act becomes applicable when there are 10 or more employees. Was your organization covered in 2013? If yes, once covered under this Act, you will remain covered forever even if the total strength of employees goes below 10.

Liability for Statutory Dues

If the contractor does not pay the statutory dues, then the liability falls on the principal employer to settle the dues. Have you received any notices like C-11 and C-18 or orders under section 45A of the Act? If yes, please contact a lawyer immediately with all your documents and provide a proper reply. Otherwise, the amount demanded by the ESI Corporation will continue to increase, and there is no way to avoid it.

Our employee strength in 2013 was above par, and it was applicable. We have no intentions of evading any dues; we want to clear it as soon as possible. No such demand has been raised. However, we have been inspected by an ESI inspector. What's the best way to end this matter?

ESI Code Number and Coverage

Was a code number issued to your factory/unit/establishment? If so, from which date was your unit covered under the ESI Act, 1948, and the rules/regulations framed thereunder?

Inspection by Social Security Officer

If your unit has been inspected by the Social Security Officer of ESIC in your area, it is expected that he must have submitted his report. What are the contents of his report, and have any demands been raised by the department?

Clarification and Expert Opinion

I hope that if you have any doubts, you have provided all the necessary facts on which you require the opinions of seniors and experts.

Regards

ESI Code Number and Coverage Details

Was a code number issued to your factory/unit/establishment? If so, from which date was your unit covered under the ESI Act, 1948, and the rules/regulations framed thereunder?

If your unit has been inspected by the Social Security Officer of ESIC in your area, it is expected that he must have submitted his report. If so, what are the contents of his report, and have any demands been raised by the department?

In case of any doubt, you should have furnished the complete facts on which you require the opinion of seniors and experts.

Yes, a code has been generated, effective from 01.01.2013.

Yes, he has inspected coverable persons, including 2 security guards from a contractor who has not paid ESI. No demands have been raised yet.

Handling Contractor ESI Payments

The contractor has denied making the payment directly. We have deducted the money and have to pay it on his behalf. How do we settle this matter?

ESI Inspection Observations and Compliance Responsibilities

Sir, you have not replied to paragraph 2. What were the observations of the ESI Inspector (Social Security Officer) after he completed his inspection? Did he issue any MEMO OF OBSERVATIONS after the completion of his inspection? Has he entered the facts of his inspection in the INSPECTION BOOK maintained by the principal employer?

When your unit was covered effective from 1/1/2013, you were required to ensure compliance from that date. Even if the contractor denies or refuses to comply, ultimately, the principal employer is responsible for such defaults. The provisions of the ESI Act, 1948, are not optional. This fact must be well known to your contractor. A period of 3 years has elapsed, and therefore, the department has all the powers to assess contributions on an ad hoc basis under section 45A, and also levy interest at 12% as well as damages under section 85-B of the said Act.

Housekeeping employees are also considered employees of the unit within the meaning of the said Act. The Act does not differentiate between regular, contract, casual, temporary, or work-charged employees. Coverage of the unit is decided by including all such persons engaged, and accordingly, the principal employer is required to ensure compliance in respect of coverable employees. Under the above circumstances, I can only suggest kindly contacting the concerned officer of ESIC, producing the complete records (if not already produced) for inspection, and ensuring compliance immediately.