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Definition of "Employee" in the ESI Act
As per the "employee" definition in the ESI Act:
"...who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent, on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment..."
Question Regarding Contractor Workers and ESI Contributions
My question is, suppose a school hires a contractor for whitewashing. Are the workers employed by the contractor considered employees of the school according to the ESI Act definition above? Additionally, do they need to deduct ESI contributions from the payment to the contractor if the contractor is not registered under the Act?
Please explain in simple language.
From India, Noida
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Definition of "Employee" in the ESI Act
As per the "employee" definition in the ESI Act:
"...who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent, on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment..."
Question Regarding Contractor Workers and ESI Contributions
My question is, suppose a school hires a contractor for whitewashing. Are the workers employed by the contractor considered employees of the school according to the ESI Act definition above? Additionally, do they need to deduct ESI contributions from the payment to the contractor if the contractor is not registered under the Act?
Please explain in simple language.
From India, Noida
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Yes. As per the definition, the contractor payment would attract ESI. My suggestion is to have the contractor submit bills as follows:
1) Cost of materials
2) Cost of hiring equipment
3) Labour charges separately.
You may need to deduct the Management Contributions of ESI from the Labour charges and pay it to ESIC.
From India, Madras
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3021) Cost of materials
2) Cost of hiring equipment
3) Labour charges separately.
You may need to deduct the Management Contributions of ESI from the Labour charges and pay it to ESIC.
From India, Madras
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
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