Why Are We Paying ESIC Deductions When There Are No Facilities in Our Area?

Dear All,

We have an office in Kolkata and are registered under ESIC. In some West Bengal districts where ESIC doesn't provide any facilities, there are no ESIC hospitals or dispensaries. Now, employees are asking why deductions are made under ESIC when the facility is not available. We are regularly paying the contributions.

Please help with what we can do for the employees and whether we should stop paying contributions for those employees. What will be the process under legal compliances?

Thank you.

1. Sir, it will be better if you examine whether the areas in West Bengal where your units are located are implemented areas under section 1(3) of the ESI Act, 1948, and rules/regulations framed thereunder. If the areas are not implemented, you can ask ESIC to clarify whether compliance is required to be made or not since such areas are not implemented. I feel that compliance is not required to be made in respect of employees working and posted in non-implemented areas.

2. If the areas where your units in West Bengal are located are implemented areas, you are required to make compliance under the said Act, but the employer as well as covered/coverable employees can insist on ESIC to make such medical arrangements immediately. You can take up the issue with the said department at their Kolkata Regional Office.

3. However, now ESIC has started extending the implementation to entire districts of the concerned States. Therefore, you can confirm whether such a notification under section 1(3) has been issued, extending the scheme to entire districts of West Bengal.

Thank you.

ESI contributions need not be remitted in respect of insured persons working in "Non-Implemented" areas, even if the establishment is covered under the ESI Act. Even employees already covered by ESI can have their contributions stopped immediately if they are working in non-implemented areas. When filing the monthly return in the portal, you must specify that the employees have worked 0 days and provide the reason as "Non-Implemented area" for such employees.

Unless your office falls under a non-implemented area, you are liable to pay a contribution. Just because in the area, ESI does not have any hospital or provide any facility, it does not mean you can stop paying the contribution. There is a difference between a non-implemented area and ESI not having any hospital and facilities.

Dear Ritesh,

I slightly disagree with your opinion. If employees are not receiving the ESIC facility in their area, why should there be a deduction from their salary? Employees always ask, if there is a deduction, where is the facility? Employees are not donating the money; it is their hard-earned money.

Thank you.

Dear Ritesh,

I slightly disagree with your opinion. If employees are not receiving the ESIC facility in that area, why should there be a deduction from their salary? Employees always ask, if there is a deduction, where is the facility? Employees are not donating the money; it is their hard-earned money.

Regards,

Siddhartha Santra