Navigating ESI and EPF Requirements for Small Sub-Units: Do We Need to Register?

Hello Dear All,

We are writing to inquire about the applicability of the ESI and EPF schemes to our factory's sub-unit located in another district. The sub-unit has fewer than 10 employees. We would like to clarify if it is necessary to register for and contribute to these schemes under these circumstances.

We kindly request your guidance on the specific requirements and exemptions related to ESIC and EPF for a sub-unit with a small workforce.

Thank you for your time and attention to this matter.

An establishment will include its branches, facilities, and other units of the same management. Therefore, if your establishment is covered under ESI and EPF, the branches and sub-units anywhere in India will also be covered. For administrative purposes only, you can take separate Sub Codes in respect of your other units, which will be an extension of the registration already taken, and cover those employees who are entitled to be covered under the sub-code.

Thanks for the concern, sir. We have a subunit with fewer than 10 employees. Even with this number, we still need to apply a subcode. Please advise.

Yes, for coverage of establishment, you have to consider the total number of employees in all the units under the same management. Therefore, even if you have fewer than 10 workers in the other unit, the unit will be covered under ESI and EPF if the primary unit is covered. No registration is required only if the subunit has a separate balance sheet and there is no financial integrality between the units, such as not transferring funds from one unit to another, etc.

Yes, even if a factory has a sub-unit in another district with fewer than 10 employees, it can still be covered under ESIC (Employees' State Insurance Corporation) and EPF (Employees' Provident Fund). Compliance with these regulations depends on meeting the criteria set by the respective authorities, which include maintaining records and ensuring contributions are made as required.