Confused About ESI vs. WC for Construction Workers? How to Resolve Billing Issues with HR

We engaged two contract workers at the construction site for the plantation of trees. In the tender, it was mentioned for ESI/WC policy both if applicable, but not clearly mentioned which policy to go for. Due to a misunderstanding in tender documents, we took ESI, and our workers worked for two months under the ESI scheme.

Now on submission of bills, the HR department objected and told us to opt for WC/Mediclaim for workers as the site is under construction and ESI is not applicable. After that, we took WC and Mediclaim policies for our two workers after two months. We need help with how to resolve this matter as HR is not doing anything to resolve the issue, and our bills are stuck. During the Corona period, things are getting worse. Workers got paid less than 10,000.00 per month as per minimum wages for performed duties.

ESI Applicability for Construction Sites

ESI would be applicable if the construction site happens to be in an ESI-notified area. So, first of all, check whether this area falls within the ESI-covered area. If it is, then the ESI contribution is to be reimbursed. Otherwise, you can apply to the ESI Corporation for a refund/adjustment of contributions for a later period, but in all likelihood, it won't be accepted. Alternatively, you can treat this as a business loss and bear with it.

Understanding Workers' Compensation and ESI Policies

The HR of your principal employer appears to be confused or lacking knowledge. The Workers' Compensation (WC) policy is implemented in cases where Employee State Insurance (ESI) is not applicable.

Steps to Resolve the Issue

To address this issue, you should discuss the matter with the head of the principal employer or with the project head of your contract. If the situation is not resolved, you may need to file a claim to ensure payment is received.

Contract Workers and ESI Benefits

Contract workers at construction sites are not entitled to ESI benefits as per a judgment upheld by the Supreme Court. The principal employer did not mention that the site is under construction, and contract workers are not entitled to ESI. Therefore, Workers' Compensation (WC) or Mediclaim is necessary.