Understanding ESI and PF for Section 8 Companies: How Do They Apply to Freelancers and Consultants?

Friends, Please clarify my doubts. If an establishment is registered under Section 8 in Tamil Nadu, they have 10 employees and more than 50 people engaged as Research Associates, Freelancers, and Consultants on a project basis.

How does ESI and PF coverage and calculation work?

Best engagement method/model for project-based individuals

Since the project-based individuals work for various establishments, what is the best engagement method/model?

Please share your views.

Thank you,

Regards, KU Srinivason

If these project fellows and research associates are paid any remuneration, then there will exist an employee-employer relationship. Both the ESI and EPF, along with all other labor Acts, will be applicable to your 'establishment'. Once your establishment is covered by ESI, it needs to be determined who should be registered as an insured employee. This determination is based on the salary/honorarium/remuneration that you offer them. If it is Rs. 21,000 or less, then they should be covered by ESI. If the salary is not more than Rs. 15,000, they should also be given EPF. Apart from ESI and EPF, other laws like the Payment of Bonus Act, Payment of Gratuity Act, Maternity Benefits Act, etc., are also applicable to your establishment and these research associates/project fellows.