Is ESI Still Required in the IT Industry If We Already Provide Employee Insurance?

Dear Seniors,

Is ESI applicable in the IT industry? We already have insurance for our employees, but is ESI still applicable?

Yes, it is applicable even to the software industry as long as the other criteria of having more than 10 employees are fulfilled. Once registered under ESI, it will remain applicable even if the employee count falls below the required threshold. If you have insurance that is superior to ESI and covers all employees, you may need to demonstrate this to the authorities to seek exemption. It is necessary to first register your company with ESI before applying for any exemptions, as this is more of an exception than a rule.

Thanks and Regards

ESI Applicability in Establishments

ESI is applicable to all factories, shops, and establishments engaging 10 or more employees (all types of employment) on any given day in the preceding 12 months; the ESI Act will be applicable. However, it is also important to determine whether the geographical area where your establishment is situated has been notified by ESIC as an implemented area or not. An implemented area is where ESIC has made available a dispensary/hospital and other infrastructure to extend ESI benefits to prospective members.

Please find attached a list of such areas in the state of Tamil Nadu.

Regards, Shailesh Parikh

[Phone Number Removed For Privacy-Reasons] Vadodara

Hi,

Yes, ESI is applicable for IT employees as well, provided their gross salary is less than 21,001.

Thank you for your reply regarding my ESI query as well as your contact email. The company has been in operation for around 5 years but is still not registered under ESI. They claim that there is an exemption for the company. I could not find the reason. Can you please share your knowledge about this?

Dear Member,

Please find out whether your industry is located in a "Non-Implemented Area" and who has granted exemption. On what grounds? Do you have any documents in support of this? Are there employees drawing a gross salary of Rs. 21,000/- per month and below?

Please also determine the ESI applicability to neighboring industries. Visit the nearest ESI office to obtain information. Remember, ignorance of the law is not an excuse.

Thank you.