Dear Sir,

I am working in Daman UT where Professional Tax and ESIC are not applicable. There is a contractor working in our unit, and he has his administrative office in Vapi, Gujarat, where ESIC and Professional Tax are applicable. They also have Workers' Compensation (WC) policy for our unit. However, despite this, they are deducting ESIC and PF Tax from their workers who are working in our unit at Daman. Could you please advise me if this is acceptable?

Thank you.

From India, Delhi
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Addressing Wrong ESI Contribution Deductions

I think the employees of the contractor can raise the issue of incorrect ESI contribution deductions with the nearest ESIC Office. This could be the Director of the Sub-Regional Office in Vadodara (Gujarat) or another local office.

The workers of the contractor can also bring up the issue of incorrect ESI contribution deductions from their wages with the principal employer, as well as with the State Government authorities appointed under the relevant rules of the Payment of Wages Act.

If, as confirmed by you in your remarks in the thread, the area has not been implemented under section 1(3) of the ESI Act, 1948, and there are no medical/ESIC Branch Office facilities available in Daman, then in my opinion, it is not appropriate to make any deductions under the said Act from the employees' wages.

From India, Noida
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