Is ESIC Required for Our Company with Only 5 Employees Earning Below ₹21,000?

Dear Seniors, please advise whether ESIC would be applicable if there are only 5 employees drawing a salary less than ₹21,000 out of a total of 280. The structure is as follows:

Employee Structure

280 - Permanent Employees (5 employees below ₹21,000)
100 - Contractual - Third-Party Payroll (almost 60 employees for whom ESIC is applicable)

Suggestions from industry experts are that our company does not get covered under ESIC until we reach at least 20 employees drawing less than ₹21,000 as a salary.

Please advise.

Regards,
Jasmine

For ESIC coverage eligibility, the exempted are also counted as manpower, irrespective of the salary above the ESIC limit. They are not eligible to pay the ESIC contribution but are in the master roll of the employer. So, as soon as the master roll exceeds ten (for factories with power) or twenty (for others), ESIC acts get applied.

In some cases, not a single employee is contributing under ESIC, but the establishment has to get covered.

1. Sir, please confirm in which state your establishment or factory is located. Is it a factory or an establishment? Furthermore, it is essential to know if the said establishment is located in an implemented area as declared under section 1(3) of the said Act.

2. It would be even better if you could contact the ESIC Social Security Officer or the appropriate Regional Office of the area to verify the position in order to ascertain the coverability of your unit under the said Act.