Is PF and ESI Mandatory for Startups? Seeking Clarity from Experienced HR Pros in Kolkata

Hi all,

I have joined a new startup company in Kolkata, West Bengal. We are currently structuring rules and regulations, hence applying for all compliance-related employment. From my knowledge and understanding, I know that PF and ESI are mandatory now, but our CA has a doubt on the same. I am expecting experienced and respected HR professionals to clarify my doubt.

Thanks in advance.
Mahasweta Moitra

ESI Compliance Resources

For ESI compliance, please visit http://www.shramsamadhan.com/2016/10...-act-1948.html.

Please note that the contribution limit has been raised from 15,000 to 21,000. Refer to the notification for details: http://www.shramsamadhan.com/2016/12...ification.html.

PF Queries and Resources

For PF queries, check out http://www.shramsamadhan.com/p/unive...-employee.html. Information on UAN-related compliance is also available here.

Other Essential Laws

Other essential laws to be aware of include:

- Gratuity: http://www.shramsamadhan.com/p/payme...act-rules.html
- Payment of Wages and Minimum Wages Act
- Shops and Establishment Act applicable in your state
- Factories Act in conjunction with the Industrial Dispute Act

As far as my knowledge goes, the Labour Ministry has asked not to cover or inspect startups for the next 2-3 years. But once the period (2-3 years) is over, the company would be covered from day 1 of its incorporation. So, it is advisable to get it started from the beginning.

You can personally visit the ESI and PF office for clarification.

Applicability of Labor Laws Based on Employee Count

The applicability of different labor laws to your establishment or company depends on the number of employees or workmen employed.

ESI Act

If the number of employees or workmen engaged, including off-roll employees (through contractors), is ten (10) or more, the ESI Act is applicable. Those drawing a gross salary or wages up to Rs. 21,000 will fall within the net of ESI coverage.

Provident Fund Act

If the number of employees or workmen, including off-roll employees (through contractors), is 20 or more, the PF Act is applicable. The present wage ceiling is Rs. 15,000.

Additional Applicable Acts

In addition, the following Acts are also applicable depending on the number of employees or workmen:

- West Bengal Shops & Establishments Act
- West Bengal Labour Welfare Fund Act
- West Bengal House Rent Allowance Act
- The Payment of Gratuity Act
- The Payment of Wages Act
- The Minimum Wages Act
- The Payment of Bonus Act
- The Maternity Benefit Act (if female employees are engaged but not covered under the ESI Act)
- The Sexual Harassment of Women at Workplace Act 2013 (if female employees are engaged)

Regards,
P.S. Lakshmanan

S.G. Management Services

Kolkata

(M) [Phone Number Removed For Privacy Reasons]