Facing a Huge ESIC Fine: How Do I Prove No Work Periods for Casual Workers?

Dear Friends, I have recently been ordered under Section 45A to pay a huge sum of Rs 1,98,000.00 for not filing returns intermittently during a no-work period of 2 to 4 months on average each year since 2011. No records are kept as we provide casual workers who are migrant (not permanent and casual). How can I justify that we were not engaged during those periods? ESIC is asking for records to prove we had no work. We can prove we have work via PO or LOI, but how can we prove otherwise? Please help.

I am from Mysore and cater to providing ESIC compliance services to Civil Contractors.

Regards, L. Mohan Pillai

[Phone Number Removed For Privacy-Reasons]

You would have filed zero contribution by showing them with zero workdays for those months. Why didn't you? Please visit the ESIC site, go to Employer grievances, and register your complaint. Also, prepare a blank muster with names of all employees for which contribution is not paid and mark them absent for all those days. Take a copy of that along with your balance sheet for that year and visit the nearest ESIC AO.

Thank you, Mr. Aniket. Blank muster for that period is okay, but what if they insist on all musters? I do not possess it, and as I recently shifted my premises where all old documents were cleared, only current documents pertaining to the last financial year have been kept. What is the period to maintain these records? Can I prepare a duplicate and submit it? I had already given an explanation and a letter, but they refused to acknowledge it. Now, an order under section 45A is also passed. I am confused.

Further, in the previous couple of months, only 6 to 8 people were present, and the rest were marked as leave. However, the claim by ESIC is for all the members, even those marked as leave to be paid. ESIC can claim like that only when there is no way to ascertain (no previous month's records). They have unjustly put forth the claim for:

1. There was no work, still, a claim is made.
2. Claimed for total members (even absentees) despite the previous members' strength record.
3. Any previous similar case history, please provide the same; it may help.
4. Can I submit docs after section 45A Order is passed?

Your help would be of great value.

Regards,

Records should be maintained for PF and ESIC; sometimes they ask for records as old as 10 years, not older than that.

You might have received many notices before this order. Give me some time; I will get back to you on the same after talking with some ESIC officials.

Dear Sir, As you have already mentioned, an order has been passed in this case, and nothing can be done. Prior to this order, you might have received a C18 and had a chance for a personal hearing. The facts provided by you must be deemed unsatisfactory as you failed to submit the records. It is essential to preserve at least 5 years of records in such cases. I would have suggested something, but unfortunately, nothing much can be done after the order. Please pay the amount as soon as possible as it incurs a 25% interest. Subsequently, you will receive C-19 as a recovery certificate of payment. Failure to pay can lead to CP2 (i.e., Recovery by force). This is the easier way.

Now, I will explain the harder way if you choose to fight. The copy of the order states that if you are not satisfied, you can proceed to the labor court. For this, you need hard evidence such as your balance sheet showing that you did not pay the salary and are not liable to pay the dues claimed by ESIC. Please ensure you are well-prepared before going to court. There are many similar cases in court.

Choose wisely.

I understand it is late, and dealing with court and legal fees, along with unwanted hassles without an assured result, seems unwise.

Regular Casual Workers and ESIC Contributions

A friend suggested that some workers, though casual, are quite regular when called to work. Can I pay them wages for the specified omitted periods (since my usual contribution for any member is for a few days ranging from 5 to 10 days during work periods) and contribute to ESIC for the same omitted period to reduce the burden of not paying the full amount demanded by ESIC?

Will ESIC accept this mode?

As the order has already been passed, it will stand as it is, along with the amount due. If you want to take any action, you have to first apply against the order in court.