Starting Short-Term Projects with Contract Labor: Are PF and ESIC Required for 5-6 Employees?

I want to start my work for 2-3 months with 5-6 employees. Currently, my factory employs only 1 person. How can I work with contract labor? Will PF and ESIC be mandatory in this case?

Compliance with PF and ESI Acts

In case you are already covered under the PF & ESI Acts, then you will continue to be liable for due compliance with them. As you are proposing to engage contract labor to carry out the work, in case of prior coverage, you will have to ensure that the contractor complies with the requirements; otherwise, you will have to pay.

In case you do not have coverage under both Acts, then you don't have to worry about them.

Dear Vishal, you have a factory with only one employee. Now you want to engage the services of 5 to 6 employees for work that would last for 2 to 3 months. Therefore, you want them on a contract basis for 2-3 months only, and it is not necessary that they should be engaged through a contractor as it would be more expensive. You can employ such people directly on a Fixed-Term Contract basis for a maximum of 3 months only. Since the total number of employees in your factory falls below 10, you are out of the coverage of ESI and EPF Acts.