Dear Experts,
We are a construction company, and I am facing this issue here. Usually, our company hires workers like casual workers to work at the construction site. Though these workers work for 1 day, 2 days, or 5 days, they don't work like permanent workers, and they demand wages per day. My query is: should we comply with the joining formalities in the form of the engagement of these workers? Whether we should provide them ESI & EPF benefits even though they work for 1 day or 2 days.
Thanks in Advance,
MOHIT
From India, Jaipur
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We are a construction company, and I am facing this issue here. Usually, our company hires workers like casual workers to work at the construction site. Though these workers work for 1 day, 2 days, or 5 days, they don't work like permanent workers, and they demand wages per day. My query is: should we comply with the joining formalities in the form of the engagement of these workers? Whether we should provide them ESI & EPF benefits even though they work for 1 day or 2 days.
Thanks in Advance,
MOHIT
From India, Jaipur
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if they are defined as EMPLOYEE and paid WAGES or SALARY, then mandatory to maintain all labor laws, and pay contributions
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Compliance with ESI and EPF Benefits
Sir, there is no option within your establishment to choose whether to provide ESI or EPF benefits to persons engaged, even for a few days or just one day. The provisions are compulsory, and compliance is required. The law, as laid down under the above Acts, namely the ESI Act of 1948 and the EPF & MPs Act of 1952, automatically applies if your unit has engaged the minimum number of persons as specified in the said Acts. Regarding the ESI Act of 1948, there is another condition that the area where the factory or establishment is located must be implemented under section 1(3) of the said Act.
There is no minimum qualifying period of service under the above Acts for a person to be eligible for coverage.
From India, Noida
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Sir, there is no option within your establishment to choose whether to provide ESI or EPF benefits to persons engaged, even for a few days or just one day. The provisions are compulsory, and compliance is required. The law, as laid down under the above Acts, namely the ESI Act of 1948 and the EPF & MPs Act of 1952, automatically applies if your unit has engaged the minimum number of persons as specified in the said Acts. Regarding the ESI Act of 1948, there is another condition that the area where the factory or establishment is located must be implemented under section 1(3) of the said Act.
There is no minimum qualifying period of service under the above Acts for a person to be eligible for coverage.
From India, Noida
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Dear Friends Kindly note that is he worked only for one hr, then he is eligible for ESI and PF. regards HR Alphonse 9443625359
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If you are engaging any kind of employees other than Act apprentices, you need to comply with deducting PF and ESI, even if they work for only 1 hour. Without fail, you should obtain Form 2 duly signed by the employee on the day of engagement for work.
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As already mentioned by other Learned members, ESI and PF are applicable even if the employee has worked for a single day.
From India, Kolkata
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From India, Kolkata
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Both the laws are applicable if worker worked for a single day.
From India, Hyderabad
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From India, Hyderabad
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The question still arises whether they are employees or not. An electrician comes to do some job, completes it, and gets paid, but the accounting system debits the expense in the "repair and maintenance" category, not in wages or salary. Take the hint and try to run smoothly.
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Verification of Accounts by ESI Social Security Officer
The ESI Social Security Officer also verifies the accounts under the category of Repair & Maintenance. If any such charges are found to be paid, contributions are claimed on the omitted wages from the employer.
Records Verification by the Department
The department generally verifies all expense account heads during their records verification. Contributions are payable and demanded by the department for wages found in any account heads in the books. While the booking of expenses in any account is at the employer's discretion, the verification of records is conducted according to the department's instructions. The verification of records, accounts books, vouchers, and bills is not restricted only to "Wages" account heads. In most cases, the Balance Sheet is also requested by the department.
From India, Noida
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The ESI Social Security Officer also verifies the accounts under the category of Repair & Maintenance. If any such charges are found to be paid, contributions are claimed on the omitted wages from the employer.
Records Verification by the Department
The department generally verifies all expense account heads during their records verification. Contributions are payable and demanded by the department for wages found in any account heads in the books. While the booking of expenses in any account is at the employer's discretion, the verification of records is conducted according to the department's instructions. The verification of records, accounts books, vouchers, and bills is not restricted only to "Wages" account heads. In most cases, the Balance Sheet is also requested by the department.
From India, Noida
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AMC Charges and ESI/EPF Compliance
Under such heads, AMC charges also come, for which the principal company pays ESI/EPF. Companies like Eureka Forbes and Otis take a plain bill from the worker, without man-count but on a job basis. If unverified, then only 20% to 30% is subjected to ESI (PF has no role in such matters).
ESIC SSO Inspection
You mentioned discussing the ESIC SSO inspection, which was abolished in 2007-08. There is no current system of regular inspection, but the CIAU conducts inspections based on pre-marked suspected concealment of employees' contributions. They do not investigate minor issues like repair and maintenance, conveyance, or labor welfare expenses.
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Under such heads, AMC charges also come, for which the principal company pays ESI/EPF. Companies like Eureka Forbes and Otis take a plain bill from the worker, without man-count but on a job basis. If unverified, then only 20% to 30% is subjected to ESI (PF has no role in such matters).
ESIC SSO Inspection
You mentioned discussing the ESIC SSO inspection, which was abolished in 2007-08. There is no current system of regular inspection, but the CIAU conducts inspections based on pre-marked suspected concealment of employees' contributions. They do not investigate minor issues like repair and maintenance, conveyance, or labor welfare expenses.
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