Do sweeper count as staff for ESIC/PF limit? ESIC officer who told me that my payment to a sweeper Rs.4000/pm looks high

One ESIC private expert has told me that even a sweeper will be considered as staff, so he should also be considered for ESIC/PF. However, I met a retired ESIC officer who told me that my payment to a sweeper of Rs. 4000/pm looks high and may indicate that he is mainly working for me. I pay Rs. 800 to a female for a small office, for which he said that clearly she must be working in many places, so she won't be considered as staff.

So, I want to know whether part-time sweepers count as staff for PF & ESIC.

My staff count is changing every month from 14-18. If I add a sweeper, then it will increase the count to 19, and from 20 onwards, PF becomes applicable.

Sweepers are employees. It is immaterial that they work for other employers while being employed by you. If you pay a fraction of the daily wage proportionate to the working hours, that will qualify for ESI, EPF, Bonus, Gratuity, etc. If the employee is female, she should also be paid maternity leave with wages for the same 26 weeks.

It is true that if the hourly rate multiplied into the daily rate and then into the monthly rate exceeds Rs 21,000, then he/she could be excluded from the coverage of ESI, accepting the notional wages principle. But for counting the number, he/she should be included. A worker engaged for a single day, even for a single hour, will be counted as a worker employed for that particular day. If on that day the number of employees exceeds 20, EPF will be applicable to your organization from that day onwards, and that status, i.e., a status that yours is a covered establishment, will never change.

Got it.

I have another question. There is another cleaning person working hourly, but he has ESI as he is a bank guard. Will he be counted as an employee for the EPF limit of 20?

It means a plumber/electrician/mason/pesticide sprayer will also become an employee with the same logic.

I'm a proprietor, and a cleaning person occasionally comes and cleans my offices. I pay hourly for their services. The individual is registered in ESIC and also works as a security guard at an ATM. Will this person be considered an employee for EPF purposes, considering that my employee count is already 18?

Let me answer one by one.

Anu000: A cleaning person engaged regularly for an hour will be counted as one employee for the purpose of coverage under EPF, even if he is working in a bank or other establishments for the rest of the hours in the day, with ESI or not.

Anonymous: A plumber or electrician will not come under the worker category because plumbing and electrical works are not regular tasks. However, if you operate a business that sends plumbers and electricians to various sites, they will be considered part of your daily operations. On the other hand, if your primary business is not plumbing activities, but you hire a plumber or electrician for maintenance purposes, they would be classified as 'independent contractors'. Consequently, they would not be included in the business's coverage for ESI or EPF, and their names would not appear on your muster rolls. There is still a debate on whether the payments made to them should be treated as labor charges and recorded for contribution. Employees casually engaged in any work not directly related to the organization's operations would not fall under the category of workmen for coverage under labor Acts.

Anu000: The situation is similar to the one you inquired about earlier. For instance, a security guard in an ATM facility would be considered an employee if they also spend time in your office for cleaning. Office cleaning is considered part of the organization's operations because it is a routine activity, whereas plumbing and electrical work, as discussed earlier, are not regular activities.

@ Madhu TK,

Your above reply Office cleaning is connected with the operations of the organization because it is a regular activity, whereas plumbing and electrical work, as discussed above, are not regular activities.

As per your above information, we have to add the housekeeper to our muster. If we add him to our roster, we have to provide EPF & ESI facilities. But if he is already a member of ESIC & EPF in another organization, how can we remit his PF & ESI under the same UAN & ESI Ins No.? I feel this may lead to double employment, and we should reconsider engaging these types of workers.

Am I right or wrong, I don't know. Kindly clarify, sir.

Thanks & Regards, Pandian P

It will not amount to double employment. In such cases, the ESI/ EPF will be paid by one organization, and the other organization will reimburse the amount paid on its behalf. With online systems in practice, the adjustment is rather difficult nowadays. That is why such employments are getting outsourced. There can be a common contractor who will provide service to you and others, and they will pay wages. You will pay the invoice raised for the respective time spent along with their ESI and EPF pertaining to it. With this, the problems of creating ESI No or UAN will be solved.

For the purpose of coverage, it is not necessary that the employee concerned should be a coverable employee. For coverage (under EPF or ESI), the total number of employees is taken into account. Even if all the employees are drawing more than Rs 21,000, the establishment will be covered. Similarly, for the coverage of EPF Act, what is required is that there should be 20 employees. If you have 18 direct employees and 2 employees engaged through a contractor (for cleaning the office), the establishment will come under EPF. It is immaterial whether the employees will be covered independently because the coverage of independent employees depends on the salary that they get.

Thank you for your response, sir, @ Madhu TK. The ESI/ EPF will be paid by one organization, and the other organization will reimburse the amount paid on its behalf.

Is the above practice legal? Can one receive a salary from two companies in the same month? Please advise.

Thanks,
Pandian P

Sharing the contribution is the practice in force and it is allowed also. Working for a different establishment for more than one establishment will not result in double employment when the hours spent in all the establishments put together are not more than 8 hours a day.

Okay, noted with thanks, sir.

Regards,
Pandian P