What if a company's HO is situated in the implemented area but the branch office is not? Will the ESI Act be applicable on the branch office also?
Further, on what basis has a demarcation been made between exempt and non-exempt areas?
From India, Mumbai
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1Further, on what basis has a demarcation been made between exempt and non-exempt areas?
From India, Mumbai
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Dear Archana,
Doesn't matter if your H.O. is registered with ESIC, the Act is however applicable to all the branches, anywhere in India. In your case, the employer has to go with WC policy (where employees are deputed in a non-implemented area). The employer's legal liability under the W.C. Act is to pay compensation to employees not covered under E.S.I. Act for bodily injury or disease sustained/contracted out of and in the course of employment is covered by this policy. Liability to employees under the Indian Fatal Accident Act 1855 and at Common Law are also covered under the policy.
However, not many areas in India are now (except northeastern India) non-implemented. The ESIC network is growing, and many companies are preferring ESIC because WC covers only IP, not family/dependents.
The classification of implemented, non-implemented areas is based on majorly demographic, geographic, population, economic/industrialization, and various other major factors, which also include the connectivity to that area and availability of medical/pharma and availability of other emergency services too.
M S V R K S
From India, Bangalore
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Doesn't matter if your H.O. is registered with ESIC, the Act is however applicable to all the branches, anywhere in India. In your case, the employer has to go with WC policy (where employees are deputed in a non-implemented area). The employer's legal liability under the W.C. Act is to pay compensation to employees not covered under E.S.I. Act for bodily injury or disease sustained/contracted out of and in the course of employment is covered by this policy. Liability to employees under the Indian Fatal Accident Act 1855 and at Common Law are also covered under the policy.
However, not many areas in India are now (except northeastern India) non-implemented. The ESIC network is growing, and many companies are preferring ESIC because WC covers only IP, not family/dependents.
The classification of implemented, non-implemented areas is based on majorly demographic, geographic, population, economic/industrialization, and various other major factors, which also include the connectivity to that area and availability of medical/pharma and availability of other emergency services too.
M S V R K S
From India, Bangalore
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Hi Mr. Ravikanth,
In a similar case, my firm is a contracting company, and our office area is an implemented area. We have 20 employees, and out of them, 17 are deployed in the non-implemented area. How do we get an ESI code because the required employee strength is less than 10 in the implemented area? Even if we get registered, do we have to subscribe for these three persons or the entire 29 persons? Kindly clarify.
From India, Madras
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In a similar case, my firm is a contracting company, and our office area is an implemented area. We have 20 employees, and out of them, 17 are deployed in the non-implemented area. How do we get an ESI code because the required employee strength is less than 10 in the implemented area? Even if we get registered, do we have to subscribe for these three persons or the entire 29 persons? Kindly clarify.
From India, Madras
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Dear Vijay,
In your case, however, the employer has to get registered with the ESIC and get a code to provide coverage to all its employees (if all the 20 employees are working on your rolls and not contract workmen/women). Please, for some time, forget about implemented or non-implemented areas. Managements/Employers try to deceive/manage the authorities/employees to save the amount that would incur for the registration process and contributions.
ESIC Coverage should be provided to all employees as per the law's point of view. Otherwise, provide the remaining employees with WC coverage! Whatever the case, an employee (be it permanent, contract, or apprenticeship, trainee) has to have that insurance cover.
If all the workmen/women are on a contract basis and working in a non-implemented area, you can go with a WC policy.
Being into IR, I firmly believe that a workman/woman must not be deprived of his/her rights and must be guarded/protected by the employer in all possible aspects. That would definitely make an employer "THE BEST" employer.
When an employee feels totally protected/safeguarded by the employer, their productivity increases, their commitment and dedication enhance, they become highly motivated, and a totally positive atmosphere would prevail in that organization, leading the market.
The truth is, many organizations are not like that! They just focus on the money going out today but forget about the returns they may get tomorrow!
I remember a couple of such organizations where excellent personnel management practices are applied. TISCO and INFOSYS are some of the best in employee welfare practices.
Regards,
M S V R K S
From India, Bangalore
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In your case, however, the employer has to get registered with the ESIC and get a code to provide coverage to all its employees (if all the 20 employees are working on your rolls and not contract workmen/women). Please, for some time, forget about implemented or non-implemented areas. Managements/Employers try to deceive/manage the authorities/employees to save the amount that would incur for the registration process and contributions.
ESIC Coverage should be provided to all employees as per the law's point of view. Otherwise, provide the remaining employees with WC coverage! Whatever the case, an employee (be it permanent, contract, or apprenticeship, trainee) has to have that insurance cover.
If all the workmen/women are on a contract basis and working in a non-implemented area, you can go with a WC policy.
Being into IR, I firmly believe that a workman/woman must not be deprived of his/her rights and must be guarded/protected by the employer in all possible aspects. That would definitely make an employer "THE BEST" employer.
When an employee feels totally protected/safeguarded by the employer, their productivity increases, their commitment and dedication enhance, they become highly motivated, and a totally positive atmosphere would prevail in that organization, leading the market.
The truth is, many organizations are not like that! They just focus on the money going out today but forget about the returns they may get tomorrow!
I remember a couple of such organizations where excellent personnel management practices are applied. TISCO and INFOSYS are some of the best in employee welfare practices.
Regards,
M S V R K S
From India, Bangalore
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Thank you, Ravi, for the useful information. However, I still have a doubt. In my present organization, we have around 40 branches on a PAN India basis. Salaries are processed from Mumbai. What if ESIC is not applicable in some states, but WC is? Do we not deduct ESIC employee contributions from the salary in those cases?
Gauri
From India, Mumbai
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Gauri
From India, Mumbai
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Gauri,
Yes, you need not/cannot deduct the ESIC contribution, but you have to take a WC, and you must be aware that WC is only the employer's responsibility. The employer must pay the premium, and not a single paisa is deducted from the employee in the WC policy. As mentioned earlier, not many states are under the unimplemented category, except for major parts of northeastern India. Please follow the attachment; it may be useful. The non-implemented list is old and not updated. :)
From India, Bangalore
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Yes, you need not/cannot deduct the ESIC contribution, but you have to take a WC, and you must be aware that WC is only the employer's responsibility. The employer must pay the premium, and not a single paisa is deducted from the employee in the WC policy. As mentioned earlier, not many states are under the unimplemented category, except for major parts of northeastern India. Please follow the attachment; it may be useful. The non-implemented list is old and not updated. :)
From India, Bangalore
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Lately, I came across a case where ESIC was deducted by the employer, and the employee was working in a non-implemented area (the payrolling system was centralized and managed from Bangalore). The management thought he's covered with ESIC (as deductions are happening), so WC policy was not taken. On a fateful day, the employee met with an accident at the working location. The employee did not get the coverage benefits of either ESIC or WC. The labor inspector's involvement saved him but costed the employer Rs. 8 lacs (excluding the hospital charges) as compensation to that employee (fatal accident on the work site - backbone injury - >1 year bed rest). Adding to that, the ESIC deduction/contribution of the employee was reimbursed by the employer with 3 times as a penalty. Employers have to be very cautious about these statutory compliances.
From India, Bangalore
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From India, Bangalore
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Thanks you very much Ravi for clearing my doubt and additinal information that you have given. True employer must be very cautious and alert about statutory compliances. Gauri
From India, Mumbai
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From India, Mumbai
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Dear All,
We are starting our new company in Mangalore, Roorkee, Uttarakhand. We want to know if ESIC is applicable in this area. If yes, then where is the ESIC Sub-Regional Office (SRO) located? If not, can we receive a notification regarding this?
From India, Gurgaon
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We are starting our new company in Mangalore, Roorkee, Uttarakhand. We want to know if ESIC is applicable in this area. If yes, then where is the ESIC Sub-Regional Office (SRO) located? If not, can we receive a notification regarding this?
From India, Gurgaon
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