Firm has 0 employees now - How to file ESIC and PF after all employees have left?

Vignesh Subramonium
The firm has 0 employees now. How to file ESIC and PF now?
umakanthan53
The ESI and EPF schemes are implemented through the respective laws only for the social security benefits of the employees. When an establishment suddenly becomes a no employee establishment for whatever reason, the establishment automatically goes out of the purview of the respective Acts.
If it so happens in the part of the year, the employer has to check his compliance upto that period and intimate the authorities concerned about the fact. If the returns are to be filed, he has to file them upto the period of coverage.
Vignesh Subramonium
So, should the firm file nil returns for PF and ESI now? The firm is outsourcing all works and has no employees now. The owner is doing all works on her own and has never filed esi/pf for herself.
Glidor
@
if the establishment is alive, with zero employees, then ESI/EPF will continue, and the establishment has to pay minimum admin charge of 75/- per month in EPF
similar way ESI will also be active,
both can be surrendered only in case of permanent shut down, and after disposal of business and closure of bank / surrender of trade license
for safeguard, drop an letter to both departments that establishment has no employee and would file no ECR in EPF or return in ESI, and assure that whenever they would engage any employee , they will follow the procedure completely
outsourcing of jobs / employees is a doubtful activity under the eyes of labor welfare departments, specially when the principal is registered under the respective acts
Vignesh Subramonium
Thank you fr your response sir.
@Glidor Sir, PF nil return is possible but how to file ESI nil return when there are no employees. Can you guide me regarding it.
Company is active and outsourcing work as of now because it is not able to get labours for work. So, it gave the entire work to a third party who does the work on fixed rates for many other companies.
Also, can you help me with what to write in the letters to be given to each department.
Also, does the owner need to file ESI/PF for herself. She has never done it for herself though.
Glidor
@
it is for safeguard of establishment to intimate immediately the present situation to both departments, ( and to other departments concerned also) that there is "zero" employment and hence the establishment effect from .............. is not submitting ECR under EPF and CR under ESI, with an undertaking that whenever they would recruit any employee, they will maintain all formalities
ESI challan can not be made with zero employee, but EPF direct challan of 75 is payable monthly,
Again be careful as being an PE ( Principal employer) both the departments may extend their hands to vigil the establishments working for you.
Vignesh Subramonium
Sir, I did not understand the last sentence.
If it means vigilance department will check the third party companies (X), then they are totally different companies with different owners. These third party companies charge for handling the material and storing it in their godown and modify the material before dispatch.
The 0 employee firm (A) has to just give details of the vehicles to X for storage purposes. Rest of the work is taken care by X. (A) has no idea of no of employees of (X) or if X follows the compliances or not. Since A was not getting labour after lockdown for her work, she started giving material to X for work and hence removed all her employees because now X is doing her entire work by taking fixed charges and she herself is doing other small paperworks.
Glidor
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PE is registered entity in govt welfare programs, and now the PE is displaying zero employees, but they are in working condition with help of TP employees,
departments have to ensure that no employee is barred to get the benefits under which the PE is registered. in another words, such employees or persons are contract labors for PE provided by TP contractor, and they are eligible to get all benefits under which the PE is registered (if not catered by TP contractor)
Wish the establishment to restore their activities with their own employees at the earliest,
Vignesh Subramonium
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Company is trying to restore manual labour workers which once available, the company will run back in full force and it will automatically require other employees to look over these manual workers. Even owner not interested to continue with TP because it is more costly affair and she is actively searching for labours but will manage work with TP till then.

Also, the TP does work for atleast 40 companies as storage and modification of materials in its godown and I have come to know that it does not follow any ESI or PF (it should because it has around 30 employees but it does not want to because it never faced any trouble from past 30 years it seems). I do not know whether the 40 companies pay ESI/PF for the employees of TP.

Please guide me how to guide the company with 0 employees now.

I have a new doubt now that, how can all companies pay ESI/PF for TP employees. Is it possible?
Glidor
@
Principal stand liable for all workers, either direct or through contractor,
for payment towards casual ancillary jobs, viz electrician, plumber etc departments usually ignores the payments made, as it is very low in comparison to regular employees,
but as you mentioned in reply, "Modification of materials" by TP, it amounts to manufacture under all respective laws, and considered principal activity to business, if (PE) principal denies it, then GST will catch the ball and fix liability of GST applicable on manufactured goods to the TP. which may cause more complex issues
Get in touch with local legal assistant/ CA, they can analyze the situation and can guide better
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