ESI Contributions

An employer has not paid ESi contributions for 20 years and ther after he has paid the entire ESi contributions payble in such a case wether employer canddeduct the entire emplyees contribution from his salary.

Hello All!
I have a query relating to ESIC.
An IT- Software company having 12 employees operating from last 4 yrs has not yet registered for ESIC. The Gross salary of all the staff is above 10K.
Is the registration mandatory ?
Regards,
Revathi

Hi Revathi,
As per the ESI Act, you have to enroll yoursefl if there is 20 or more than 20 employees worked on any one day in the last 12 months.
Since you have less than 20 employees in your company, there is no requirement for the registration under ESI Act.
For the above mention purpose you have to maintain all the records, so that whenever any ESI official will come you are in a position to produce those records.
AMATYA

An employer who didnot 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 a arrears. In such 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 retrspective effect, then he can make an arrangement with the workers so that workers shall get the befit of the current benefit period.
Regards,
Madhu.T.K

Thank u very much for the reply. In the instant case the employer is already covered under ESI act but failed to deduct ESI contributions. So in such case what the employer has to do. Is there any case law supporting your reply or is it is stipulated ion the act. I thank u 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 employer to remit the same along with his share. Therefore, the question of deducting the employees share again will not arise.
Now, if the employer had OMITTED to deduct the employees share for all these 20 years, then also 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 responsibilty lies on the employer, I do not think wise in deducting the employees' share with retrspective effect.
Let me try to get some case related to it and then I will get back to you.
Regards,
Madhu.T.K

hi,
It is an obligation and primary responsibility of the principal employer to ensure the aforesaid contribution timely.
RNSwamy