An employer has not paid ESI contributions for 20 years. Thereafter, he has paid the entire ESI contributions payable. In such a case, whether the employer can deduct the entire employee's contribution from his salary.
I have a query relating to ESIC. An IT-Software company having 12 employees operating for the last 4 years has not yet registered for ESIC. The gross salary of all the staff is above 10K. Is the registration mandatory?
As per the ESI Act, you have to enroll yourself if there are 20 or more employees who have worked on any one day in the last 12 months. Since you have fewer than 20 employees in your company, there is no requirement for registration under the ESI Act. For the purpose mentioned above, you have to maintain all the records so that whenever any ESI official comes, you are in a position to produce those records.
An employer who did not pay contributions for 20 years!
Is he made covered by the ESI officials with retrospective effect? If he was initially covered and failed to remit the contributions, then the total contributions due from him (employer's contribution + employees' contribution) shall be recovered as arrears. In such a case, he cannot deduct the employee's share from the wages of the employees. This is because he should have deducted it in time and paid it to the ESIC. If he is covered now only but with retrospective effect, then he can make an arrangement with the workers so that workers shall get the benefit of the current benefit period.
In the instant case, the employer is already covered under the ESI Act but failed to deduct ESI contributions. In such a case, what does the employer have to do? Is there any case law supporting your reply, or is it stipulated in the act? I thank you in advance for the reply.
A covered employer should have deducted employees' contributions before payment of wages to the workmen. As far as employees are concerned, they have already 'contributed' their share. Now it is the turn of the employer to remit the same along with his share. Therefore, the question of deducting the employees' share again will not arise.
If the employer had omitted to deduct the employees' share for all these 20 years, then it is highly prejudicial to call on the employees to share their contributions for all these 20 years as the amount itself will be very high. Since the primary responsibility lies with the employer, I do not think it wise to deduct the employees' share with retrospective effect.
Let me try to find some cases related to it, and then I will get back to you.
It is an obligation and primary responsibility of the principal employer to ensure the aforesaid contribution is made timely.
RNSwamy
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