Can We Exempt a Small Branch from PF and ESIC Due to Fewer Employees?

We have two branches of the same company, and one branch is covered under PF, but the other branch has fewer than 20 employees. Is there any option that we can exempt the smaller branch from PF and ESIC?

Dear Shepherd,

If the company is the same, then PF & ESIC are applicable even if the other branch has fewer employees, as the parent company's policies apply for PF/ESIC.

Thanks,
Vineet

Hi,

Yes, it is applicable. Kindly refer to the links for detailed information:
- [Providence Fund (PF)](https://www.stacowiki.in/en/acts/st-central/provident-fund-pf/)
- [The Employees' State Insurance Act, 1948](https://www.stacowiki.in/en/acts/st-central/the-employees-state-insurance-act1948/)

Please note that once the EPF Act is made applicable to the main unit, it automatically applies to all units across India. The question of independent coverage of a branch of an EPF-covered main unit does not arise. However, for the sake of administrative convenience, you can apply for a PF Sub-Code Number for your branches if they are located in different parts of India. The question of having 20 employees for each branch for the purpose of the application of the EPF Act does not arise.

The same principle applies to ESI as well. However, if the branch is located in a "Non-Implemented Area," the applicability of the ESI Act to the branch does not arise as it is situated in a Non-Implemented area.