ESI Coverage Confusion: Do We Need to Pay for Branches with Less Than 10 Staff?

We have our HO at Chennai. We process and pay salary for staff at Chennai as well as staff at Salem, Coimbatore, etc.

My problem is we have an ESI Employee code number at Chennai through which we pay the ESI amount deducted from staff at Chennai. But as far as other stations are concerned, my doubt is, are we bound to pay ESI if our staff strength at the respective branches is below 10? Presently, we have a separate ESI Employee code for all branches, irrespective of whether there are 10 staff or fewer/more than 10 staff.

As far as Salem is concerned, there is only one staff (like a resident rep), and salary is paid through a Salary Account Bank. Please clarify whether we are bound to pay ESI for branches at various places outside Chennai if our staff strength is less than the prescribed limit fixed under the ACT.

Dear Member,

The following points will help you understand the provisions of the ESI Act. When the Act becomes applicable and the workforce subsequently drops below 10, the Act will remain in force even if the prescribed strength is lower.

If branches have separate legal entities and maintain distinct sets of accounts, you can use different code numbers and file returns separately. The employee can work at any location, but the determining factor for ESI coverage is where they receive their salary, whether the branch falls under the ESI Act or not.

Regards,
Murugavel.B
Chennai.

Hi,

Please note the following:

1. You may take the ESI main code at Chennai if the employee strength reaches the prescribed limit.
2. For other locations, you need to obtain the ESI - SUB CODE so that the employees working in these areas can access treatment from local ESI dispensaries.
3. Monthly ESI remittances will be processed from the HO - Chennai.
4. Half-yearly ESI returns must be submitted from the respective locations.
5. There is no question of a limit in sub-locations; even for one member, you can acquire a sub-code for ESI, enabling them to access local treatment.

I hope the above is clear.

Regards,
S. Sathish Kumar

Hi Sathish Kumar,

I am facing the following problem: we have one and only office in Chennai, but our technicians work at different locations in Tamil Nadu where we don't have a branch office. We distribute the salary from Chennai and maintain all the records there. When I tried to file the declaration form for ESI, the manager refused to accept it, saying that we chose the dispensaries in Salem, Madurai, Trichy, and mentioned the local office as Chennai. He asked me to get the sub-code from the ESI branch office where the dispensaries were chosen.

Please let me know what to do. Do I need to get the sub-code from the regional office in Chennai or from the branch office where the ESI dispensary is located?

Please help.

Regards,
Satheesh

Hi,

Please note the following:

1. You may take the ESI main code in Chennai if the employee strength reaches the prescribed limit.
2. For other locations, you need to obtain an ESI - SUB CODE so that the employees working in those areas can avail treatment from local ESI dispensaries.
3. Monthly ESI remittances will be handled from the Head Office in Chennai.
4. Half-yearly ESI returns must be submitted from the respective locations.
5. There is no limit in sub-locations, meaning even for one member, you can obtain a sub-code for ESI so they can access local treatment.

I hope the above is clear.

Regards,
S. Sathish Kumar