Dear Seniors,
I represent an 18-year-old embedded company located in Bangalore with around 80 employees. We provide private insurance for all employees but do not offer ESI.
Our organization has 21 employees earning under 10,000 CTC per month, including Technicians, Office Assistants, Front office staff, Trainees, and Apprentice employees. I have some doubts regarding ESI and hope you can help me resolve them:
1. Is ESI mandatory for employees in an organization?
2. Are trainees or apprentices eligible for ESI?
3. Are there any alternatives to ESI, such as other corporate private insurance options?
4. What are the repercussions if the organization does not comply with the ESI act?
Looking forward to hearing from you.
Regards,
Jagdish
Email: jagdishraoc@gmail.com
From India, Bangalore
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4I represent an 18-year-old embedded company located in Bangalore with around 80 employees. We provide private insurance for all employees but do not offer ESI.
Our organization has 21 employees earning under 10,000 CTC per month, including Technicians, Office Assistants, Front office staff, Trainees, and Apprentice employees. I have some doubts regarding ESI and hope you can help me resolve them:
1. Is ESI mandatory for employees in an organization?
2. Are trainees or apprentices eligible for ESI?
3. Are there any alternatives to ESI, such as other corporate private insurance options?
4. What are the repercussions if the organization does not comply with the ESI act?
Looking forward to hearing from you.
Regards,
Jagdish
Email: jagdishraoc@gmail.com
From India, Bangalore
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Point wise Answer to your queries are as follows:
1. Is ESI a mandatory for employees in an organization.
YES
2. Trainees or apprentice eligible for ESI.
Trainees apart from Apprentice are covered under ESI.
3. Any other alternative in place of ESI, as other corporate private Insurance.
NO
4. what are the repercussions, if not followed with ESI act in the organization.
Find below the powers of the Inspector and penalties under ESI Act.
Powers of Inspectors:
The Inspectors are vested with following powers to carry out their duties and functions aforesaid:
To require any employer or contractor to furnish to him necessary information;
To enter, at any reasonable time, any office, establishment, factory or other premises of the employer or contractor, and require the person in change thereof to produce for examination accounts, books and documents relating to the employment of persons and payment of wages, or to furnish to him necessary information;
To examine the employer or contractor, his agent or servant, or any person found in the factory, establishment, office or other premises, or any employee; and
To make copies of, or take extracts from, any register, account books or other document maintained in such factory, establishment, office etc.
OBLIGATIONS OF EMPLOYERS
The employer should get his factory or establishments registered with the E.S.I. Corporation within 15 days after the Act becomes applicable to it, and obtain the employer?s Code Number.
The employer should obtain the declaration form from the employees covered under the Act and submit the same alongwith the return of declaration forms, to the E.S.I. office. He should arrange for the allotment of Insurance Numbers to the employees and their Identity Cards.
DISPUTES & REMEDIES
The Employees State Insurance Scheme is administered by the Employees? State Insurance Corporation, which is constituted by the Central Government. It consists of representatives of the Central Government, medical profession and members of Parliament. The Corporation is vested with the following powers.
To promote measures for the improvement of the health and welfare of insured employees and for the rehabilitation and re-employment of those who have been disabled or injured
To appoint inspectors for purposes of the Act.
To determine the amount of contribution payable in respect of employees of a factory or establishment, which has not furnished or maintained any particulars, registers or records.
EMPLOYEES INSURANCE COURT
Any dispute arising under the Act shall be decided by the Employees Insurance Court and not by a Civil Court. It is constituted by the State Government for such local areas as may be specified and consists of such number of judges, as the Government may think fit. It shall adjudicate on the following disputes and claims.
Disputes as to ?
Whether an employee is covered by the Act or whether he is liable to pay the contribution, or
The rate of wages or average daily wages of an employee, or
The rate of contribution payable by the employer in respect of any employee, or
The person who is or was the principle employer in respect of any employee, or
The right to any benefit an the amount and duration thereof, or
Any direction issued by the Corporation on a review of any payment of dependents? benefit, or
Any other matter in respect of any contribution or benefit or other due payable or recoverable under the Act.
Claims as to ?
Recovery of contributions from the principle employer,
Recovery of contributions from a contractor,
Recovery for short payment or non-payment of any contribution under section 68,
Recovery of the value or amount of benefits received improperly under section 70,
Recovery of any benefit admissible under the Act
No dispute shall be admitted unless the employer deposits with the Court 50% of the amount due from him as claimed by the Corporation.
APPEAL
An appeal shall lie to the High Court within 60 against an order of the Employees? Insurance Court if it involves a substantial question of law.
The employer should deposit the employees? and his own contributions to the E.S.I. Account in the prescribed manner, whether he has sufficient resources or not, his liability under the Act cannot be disputed. He can not justify non-payment of E.S.I. contribution due to non-availability of finance.
The employer should furnish a Return of Contributions alongwith the challans of monthly payment, within 30 days of the end of each contribution period.
The employer should not reduce the wages of an employee on account of the contribution payable by him (employer).
The employer should cause to be maintained the prescribed records/registers namely the register of employees, the inspection book and the accident book.
The employer should report to the E.S.I. authorities of any accident in the place of employment, within 24 hours or immediately in case of serious or fatal accidents. He should make arrangements for first aid and transportation of the employee to the hospital. He should also furnish to the authorities such further information and particulars of an accident as may be required.
The employer should inform the local office and the nearest E.S.I. dispensary/hospital, in case of death of any employee, immediately.
The employer must not put to work any sick employee and allow him leave, if he has been issued the prescribed certificate.
The employer should not dismiss or discharge any employee during the period he/she is in receipt of sickness/maternity/temporary disablement benefit, or is under medical treatment, or is absent from work as a result of illness duly certified or due to pregnancy or confinement.
Legal provisions
Section 72 of the Act, places a bar upon the powers of an employer with regard to reduction of wages of an employee for reasons of his liability to pay contribution.
Section 73
Under Section 73, an employer cannot dismiss or punish an employee during the period of his certified sickness etc. Contravention of these provisions attracts penalties provided under Section 85 of the Act.
Regulation 97
Regulation 97 permits an employer to discontinue or reduce benefits payable to his employees under conditions of their service which .are similar to the benefits conferred by the Act, to the extent specified below, namely
a) From the date of the commencement of the first benefit period following the Appointed Day for his factory or establishment -
Sick leave on half pay to the full extent;
Such proportion of any combined general purposes and sick leave on half pay as may be assigned as a sick leave but in any case not exceeding 50 per cent of such combined leave.
b) Any maternity benefits granted to a woman employee to the extent to which such a woman employee may become entitled to the Maternity Benefit under the ESI Act.
Where an employee avails himself/herself of any leave from the employer for sickness, maternity or temporary disablement, the employers shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he/she may be entitled under the Act for the corresponding period.
It is only when a workman actually obtains or receives cash benefit under the ESI Scheme that the employer can exercise his right to make a suitable deduction from the wages due to him by way of leave salary.
Offences & Penalties
Following Penalties are imposed by the E.S.I. Departments in different offences for any establishment under the E.S.I. Act 1948.
Which shall not be less than one year and a fine of ten thousand rupees in case of default in payment of the employees' contribution which as been deducted by the employer from the employees' wages.
Which shall not be less than six months and a fine of five thousand rupees, in any other case.
However, the court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a lesser term.
From India, Delhi
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1. Is ESI a mandatory for employees in an organization.
YES
2. Trainees or apprentice eligible for ESI.
Trainees apart from Apprentice are covered under ESI.
3. Any other alternative in place of ESI, as other corporate private Insurance.
NO
4. what are the repercussions, if not followed with ESI act in the organization.
Find below the powers of the Inspector and penalties under ESI Act.
Powers of Inspectors:
The Inspectors are vested with following powers to carry out their duties and functions aforesaid:
To require any employer or contractor to furnish to him necessary information;
To enter, at any reasonable time, any office, establishment, factory or other premises of the employer or contractor, and require the person in change thereof to produce for examination accounts, books and documents relating to the employment of persons and payment of wages, or to furnish to him necessary information;
To examine the employer or contractor, his agent or servant, or any person found in the factory, establishment, office or other premises, or any employee; and
To make copies of, or take extracts from, any register, account books or other document maintained in such factory, establishment, office etc.
OBLIGATIONS OF EMPLOYERS
The employer should get his factory or establishments registered with the E.S.I. Corporation within 15 days after the Act becomes applicable to it, and obtain the employer?s Code Number.
The employer should obtain the declaration form from the employees covered under the Act and submit the same alongwith the return of declaration forms, to the E.S.I. office. He should arrange for the allotment of Insurance Numbers to the employees and their Identity Cards.
DISPUTES & REMEDIES
The Employees State Insurance Scheme is administered by the Employees? State Insurance Corporation, which is constituted by the Central Government. It consists of representatives of the Central Government, medical profession and members of Parliament. The Corporation is vested with the following powers.
To promote measures for the improvement of the health and welfare of insured employees and for the rehabilitation and re-employment of those who have been disabled or injured
To appoint inspectors for purposes of the Act.
To determine the amount of contribution payable in respect of employees of a factory or establishment, which has not furnished or maintained any particulars, registers or records.
EMPLOYEES INSURANCE COURT
Any dispute arising under the Act shall be decided by the Employees Insurance Court and not by a Civil Court. It is constituted by the State Government for such local areas as may be specified and consists of such number of judges, as the Government may think fit. It shall adjudicate on the following disputes and claims.
Disputes as to ?
Whether an employee is covered by the Act or whether he is liable to pay the contribution, or
The rate of wages or average daily wages of an employee, or
The rate of contribution payable by the employer in respect of any employee, or
The person who is or was the principle employer in respect of any employee, or
The right to any benefit an the amount and duration thereof, or
Any direction issued by the Corporation on a review of any payment of dependents? benefit, or
Any other matter in respect of any contribution or benefit or other due payable or recoverable under the Act.
Claims as to ?
Recovery of contributions from the principle employer,
Recovery of contributions from a contractor,
Recovery for short payment or non-payment of any contribution under section 68,
Recovery of the value or amount of benefits received improperly under section 70,
Recovery of any benefit admissible under the Act
No dispute shall be admitted unless the employer deposits with the Court 50% of the amount due from him as claimed by the Corporation.
APPEAL
An appeal shall lie to the High Court within 60 against an order of the Employees? Insurance Court if it involves a substantial question of law.
The employer should deposit the employees? and his own contributions to the E.S.I. Account in the prescribed manner, whether he has sufficient resources or not, his liability under the Act cannot be disputed. He can not justify non-payment of E.S.I. contribution due to non-availability of finance.
The employer should furnish a Return of Contributions alongwith the challans of monthly payment, within 30 days of the end of each contribution period.
The employer should not reduce the wages of an employee on account of the contribution payable by him (employer).
The employer should cause to be maintained the prescribed records/registers namely the register of employees, the inspection book and the accident book.
The employer should report to the E.S.I. authorities of any accident in the place of employment, within 24 hours or immediately in case of serious or fatal accidents. He should make arrangements for first aid and transportation of the employee to the hospital. He should also furnish to the authorities such further information and particulars of an accident as may be required.
The employer should inform the local office and the nearest E.S.I. dispensary/hospital, in case of death of any employee, immediately.
The employer must not put to work any sick employee and allow him leave, if he has been issued the prescribed certificate.
The employer should not dismiss or discharge any employee during the period he/she is in receipt of sickness/maternity/temporary disablement benefit, or is under medical treatment, or is absent from work as a result of illness duly certified or due to pregnancy or confinement.
Legal provisions
Section 72 of the Act, places a bar upon the powers of an employer with regard to reduction of wages of an employee for reasons of his liability to pay contribution.
Section 73
Under Section 73, an employer cannot dismiss or punish an employee during the period of his certified sickness etc. Contravention of these provisions attracts penalties provided under Section 85 of the Act.
Regulation 97
Regulation 97 permits an employer to discontinue or reduce benefits payable to his employees under conditions of their service which .are similar to the benefits conferred by the Act, to the extent specified below, namely
a) From the date of the commencement of the first benefit period following the Appointed Day for his factory or establishment -
Sick leave on half pay to the full extent;
Such proportion of any combined general purposes and sick leave on half pay as may be assigned as a sick leave but in any case not exceeding 50 per cent of such combined leave.
b) Any maternity benefits granted to a woman employee to the extent to which such a woman employee may become entitled to the Maternity Benefit under the ESI Act.
Where an employee avails himself/herself of any leave from the employer for sickness, maternity or temporary disablement, the employers shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he/she may be entitled under the Act for the corresponding period.
It is only when a workman actually obtains or receives cash benefit under the ESI Scheme that the employer can exercise his right to make a suitable deduction from the wages due to him by way of leave salary.
Offences & Penalties
Following Penalties are imposed by the E.S.I. Departments in different offences for any establishment under the E.S.I. Act 1948.
Which shall not be less than one year and a fine of ten thousand rupees in case of default in payment of the employees' contribution which as been deducted by the employer from the employees' wages.
Which shall not be less than six months and a fine of five thousand rupees, in any other case.
However, the court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a lesser term.
From India, Delhi
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Thank you for clearing my doubts. I have two more queries regarding understanding:
1. What will be the employees' salary slabs eligible for ESI in terms of gross/CTC (applicable in Bangalore/Karnataka)?
2. What is the minimum to maximum number of employees' strength in an organization who are eligible for ESI?
I hope you will also clear these doubts for me.
Regards,
Jagdish
From India, Bangalore
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1. What will be the employees' salary slabs eligible for ESI in terms of gross/CTC (applicable in Bangalore/Karnataka)?
2. What is the minimum to maximum number of employees' strength in an organization who are eligible for ESI?
I hope you will also clear these doubts for me.
Regards,
Jagdish
From India, Bangalore
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The eligibility for coverage under the ESI, the Gross monthly earnings of the employee should be less than Rs. 10,000.00 (Not CTC).
APPLICABILITY OF THE ACT & SCHEME: IS EXTENDED IN AREA WISE TO FACTORIES USING POWER & EMPLOYING 10 OR MORE PERSONS AND NON-POWER USING MANUFACTURING UNITS AND ESTABLISHMENTS EMPLOYING 20 OR MORE PERSONS UP TO RS. 10,000/- P.M. W.E.F. 1.10.2006. IT HAS ALSO BEEN EXTENDED TO SHOPS, HOTELS, RESTAURANTS, ROADS, MOTOR TRANSPORT UNDERTAKINGS, EQUIPMENT MAINTENANCE STAFF IN THE HOSPITALS.
From India, Delhi
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APPLICABILITY OF THE ACT & SCHEME: IS EXTENDED IN AREA WISE TO FACTORIES USING POWER & EMPLOYING 10 OR MORE PERSONS AND NON-POWER USING MANUFACTURING UNITS AND ESTABLISHMENTS EMPLOYING 20 OR MORE PERSONS UP TO RS. 10,000/- P.M. W.E.F. 1.10.2006. IT HAS ALSO BEEN EXTENDED TO SHOPS, HOTELS, RESTAURANTS, ROADS, MOTOR TRANSPORT UNDERTAKINGS, EQUIPMENT MAINTENANCE STAFF IN THE HOSPITALS.
From India, Delhi
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Hi FRIENDS,
Whether ESI, PF, and Gratuity are applicable to all types of companies? If no, what type of company should provide those benefits to employees? What are all the eligibility criteria? If the company has fewer than 10 employees, what benefits are applicable to employees? Also, guide me, friends, are CL, SL, PL, and Medical Leave applicable to all types of employment?
From India, Madras
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Whether ESI, PF, and Gratuity are applicable to all types of companies? If no, what type of company should provide those benefits to employees? What are all the eligibility criteria? If the company has fewer than 10 employees, what benefits are applicable to employees? Also, guide me, friends, are CL, SL, PL, and Medical Leave applicable to all types of employment?
From India, Madras
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For ESI applicability, I have provided the details in my previous post.
For the PF Act, a new amendment has been introduced stating that it will now be applicable to industries with 10 or more employees; previously, it was for 20 or more employees. The details are outlined below:
[EPF Approved For Businesses With Ten Or More Employees]
In a significant decision, the government has approved the proposal to include businesses with ten or more employees under the coverage of the Employee's Provident Fund (EPF). Previously, the threshold was twenty or more workers. There has been no decision made regarding revising the interest rate of the EPF corpus fund for the year 2008-09. According to the new decision, any business with ten or more employees must deduct EPF and make a corresponding contribution.
Source: 05-07-08 www.ptinews.com
For companies with fewer than 10 employees, the Shop & Establishment Act applies. You can refer to the Shop & Establishment Rules of your state for more information.
"Hi FRIENDS,
Are ESI, PF, and Gratuity applicable to all types of companies? If not, what type of companies are required to provide these benefits to employees? What are the eligibility criteria? If a company has fewer than 10 employees, what benefits are applicable to the employees? Additionally, can you advise if Casual Leave (CL), Sick Leave (SL), Privilege Leave (PL), and Medical Leave are also applicable to all types of employment?"
From India, Delhi
Acknowledge(0)Amend(0)
For the PF Act, a new amendment has been introduced stating that it will now be applicable to industries with 10 or more employees; previously, it was for 20 or more employees. The details are outlined below:
[EPF Approved For Businesses With Ten Or More Employees]
In a significant decision, the government has approved the proposal to include businesses with ten or more employees under the coverage of the Employee's Provident Fund (EPF). Previously, the threshold was twenty or more workers. There has been no decision made regarding revising the interest rate of the EPF corpus fund for the year 2008-09. According to the new decision, any business with ten or more employees must deduct EPF and make a corresponding contribution.
Source: 05-07-08 www.ptinews.com
For companies with fewer than 10 employees, the Shop & Establishment Act applies. You can refer to the Shop & Establishment Rules of your state for more information.
"Hi FRIENDS,
Are ESI, PF, and Gratuity applicable to all types of companies? If not, what type of companies are required to provide these benefits to employees? What are the eligibility criteria? If a company has fewer than 10 employees, what benefits are applicable to the employees? Additionally, can you advise if Casual Leave (CL), Sick Leave (SL), Privilege Leave (PL), and Medical Leave are also applicable to all types of employment?"
From India, Delhi
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Hi Rajeev
I have query about the ESI payment responsibility. Is the HR is responsible for ESI payment or Accounts . To my knowledge, HR is responsible till the statements are forwarded to the acounts department and then accounts department has to see that the payment has to be done on time.
Please let me know if Iam wrong.
Bye
Usha
From India, Hyderabad
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I have query about the ESI payment responsibility. Is the HR is responsible for ESI payment or Accounts . To my knowledge, HR is responsible till the statements are forwarded to the acounts department and then accounts department has to see that the payment has to be done on time.
Please let me know if Iam wrong.
Bye
Usha
From India, Hyderabad
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Hi Usha,
The primary responsibility for ESI payment lies with HR personnel. HR is responsible for providing advice to the Accounting department regarding ESI payments, submitting the same, and collecting the ESI Challans after clearance. During ESI inspections, it is HR who will be held accountable for ESI compliance, not the Accounts Department.
From India, Delhi
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The primary responsibility for ESI payment lies with HR personnel. HR is responsible for providing advice to the Accounting department regarding ESI payments, submitting the same, and collecting the ESI Challans after clearance. During ESI inspections, it is HR who will be held accountable for ESI compliance, not the Accounts Department.
From India, Delhi
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First, check the area the establishment is covered under ESI Act purview. If it is in the purview of ESI coverage, your establishment must be covered under the ESI Act. You need to submit registration forms and obtain ESI code no from the regional office concerned.
Apprentices are not covered under ESI Act, but trainees are covered. There is no other substitution for ESI; if the area is under the ESI coverage, you must follow the ESI Act.
If your establishment is not registered, afterwards you have to make the contributions from both the employee and employer with heavy penalties and possible imprisonment for the employer who escapes from the ESI Act.
From India, Hyderabad
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Apprentices are not covered under ESI Act, but trainees are covered. There is no other substitution for ESI; if the area is under the ESI coverage, you must follow the ESI Act.
If your establishment is not registered, afterwards you have to make the contributions from both the employee and employer with heavy penalties and possible imprisonment for the employer who escapes from the ESI Act.
From India, Hyderabad
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To the best of my knowledge of the ESI Act, the apprentices under the Standing Orders of the Company are not covered. The Supreme Court has reiterated in a case relating to EPF that the trainees are apprentices. The ESI authorities are fully aware of this.
S. Krishnamoorthy
From United States, Roslindale
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S. Krishnamoorthy
From United States, Roslindale
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Hi,
I request you to kindly provide me with the process and documents required for creating the ESIC subcode in different locations if the company is registered under ESIC in Mumbai. Additionally, could we obtain a new ESIC code for all locations instead of creating subcodes?
From India, Calcutta
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I request you to kindly provide me with the process and documents required for creating the ESIC subcode in different locations if the company is registered under ESIC in Mumbai. Additionally, could we obtain a new ESIC code for all locations instead of creating subcodes?
From India, Calcutta
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SC 09 ESI IMP on Applicability.p df
Changes in the Applicability and Coverage of ESI Scheme under the Code on Social Security.doc