Hi All,
My confusion is regarding ESI eligibility. Ours is an architectural firm where total no of regular, permanent employee is 37 (excluding directors). But employees getting gross salary upto 10,000/- is only 15, (10,000 is the upper limit of being eligible for ESI registration). . Rest of the employees are above that slab.
As per legal consultant only companies where eligible employee (i.e. 10,000 or below that) are 20 or more, are eligible to get the registration. As of now we are not liable for ESI submission as total no of “eligible” employees is only 15.
Please confirm or suggest, is it legally correct? We will not come under any legal offence?
P.S: We don’t have any production/manufacturing unit but our main work is related to computers (“with aid of power”) so, again I was a bit confused that in traditional terms can we come under industries with aid of power?
Kindly reply as soon as possible as we have already started with salary deduction in account of ESI.
:?::icon4:
From India, Pune
My confusion is regarding ESI eligibility. Ours is an architectural firm where total no of regular, permanent employee is 37 (excluding directors). But employees getting gross salary upto 10,000/- is only 15, (10,000 is the upper limit of being eligible for ESI registration). . Rest of the employees are above that slab.
As per legal consultant only companies where eligible employee (i.e. 10,000 or below that) are 20 or more, are eligible to get the registration. As of now we are not liable for ESI submission as total no of “eligible” employees is only 15.
Please confirm or suggest, is it legally correct? We will not come under any legal offence?
P.S: We don’t have any production/manufacturing unit but our main work is related to computers (“with aid of power”) so, again I was a bit confused that in traditional terms can we come under industries with aid of power?
Kindly reply as soon as possible as we have already started with salary deduction in account of ESI.
:?::icon4:
From India, Pune
All the employees whether drawing salary less than 10000 or not are taken into consideration for counting strength of the organisation.
So it is better u apply for esi registration as early as possible
From India, Dehra Dun
1So it is better u apply for esi registration as early as possible
From India, Dehra Dun
Hi Arun,
Thanks for response. We have started with the registration but then we got to know this criterion from one of the legal consultants we approached. Till yet i have consulted many ppl and the answers i got are from both sides.
So i really need a bit of consensus from seniors to go ahead. Because any wrong info will project a wrong image of company in front of its employees.
Rashmi
From India, Pune
Thanks for response. We have started with the registration but then we got to know this criterion from one of the legal consultants we approached. Till yet i have consulted many ppl and the answers i got are from both sides.
So i really need a bit of consensus from seniors to go ahead. Because any wrong info will project a wrong image of company in front of its employees.
Rashmi
From India, Pune
Dear R. Singh, Your company is not eligible for ESI registration – and there will be no ESI deductions form salaries. Regards Pankaj Chandan
From India, New delhi
From India, New delhi
dear mr pankaj has rightly said after the judgement of supreme court ,which was given to this forum.i feel now it is eligible employee. rwegards j s malik
From India, Delhi
From India, Delhi
Dear R. Singh, Your legal consultant is absolutely right. You need not to go for registration under ESI Act. Regards. Pradip.S
From India, Mumbai
From India, Mumbai
Dear R.Singh,
As per the factory Act,it is applicable to you.but your firm is running in commecial/residentail cum commercial area and all the facilities of medical help is available.Some state governament give exemtion where eligible employees less than 20.
But in industrial area,it has to covered all employees where upto 20 persons employed even few eligibel.
Employees of covered units and establishments drawing wages upto Rs.10,000/- per month (excluding remuneration for overtime) come under the purview of the ESI Act, 1948 for multi-dimensional social security benefits. therefore ESI act does not apply to you,you must have atleast 20 eligible persons,however this has to declare to State govt or local ESIC office.
It will better ,you should submit application to ESI office and ask for applicablity,in most of the time we used to submit application and take written noted from their office to avoid any other legal implecation.
Best Regards
Sajid Ansari
From India, Delhi
As per the factory Act,it is applicable to you.but your firm is running in commecial/residentail cum commercial area and all the facilities of medical help is available.Some state governament give exemtion where eligible employees less than 20.
But in industrial area,it has to covered all employees where upto 20 persons employed even few eligibel.
Employees of covered units and establishments drawing wages upto Rs.10,000/- per month (excluding remuneration for overtime) come under the purview of the ESI Act, 1948 for multi-dimensional social security benefits. therefore ESI act does not apply to you,you must have atleast 20 eligible persons,however this has to declare to State govt or local ESIC office.
It will better ,you should submit application to ESI office and ask for applicablity,in most of the time we used to submit application and take written noted from their office to avoid any other legal implecation.
Best Regards
Sajid Ansari
From India, Delhi
Hi All, Thanks to all of you for your valuable help and guidance. Sajid, your suggestion of getting legal permission to avoid complication, is good. Thanks again, Rashmi
From India, Pune
From India, Pune
Sir,
One thing I would like to clear. On a methodical arrival of the law points based on your facts, firstly Architectural firms are not liable to regn under Factories Act. They should register under Shops Act. Secondly Architectural firms thus are liable for ESI coverage. The scheme says very simply that eligibility for ESI coverage is (a) if the entity is using elctricity for its work then it should have 10 people minimum for implementation of ESI, OR, (b) if the entity is not using any power at all then it should have 20 people for implementation of ESI scheme.
Over the years the clarity on the required number of people has been thrown by various court decisions and notifications and thus the figures 10 or 20 depict eligible workers.
THus eligibility of workers is decided on the salary. The present salary limit for ESI coverage is Rs.10000/-. So in cases of establishments using power they should have a minimum of 10 employees drawing Rs.10000/- or less. OR if not using power then they should have a minimum of 20 employees drawing Rs.10000/- or less.
Now lets come to the case of a establishment employing about 30 people in total of which they are having only about 08 employees drawing Rs.10000/- and below. In such a case they should submit the ESI registration form. In some Regions the ESI department has been found to send a Insurance Inspector to check the records and if found to be correct then give a certificate of non coverage. In some Regions the Department simply keeps quiet.
In case of establishment having only about 8 employees eligible for ESI but is employing through contract like security and housekeeping staff who are covered separately under ESI then the establishment will be allotted ESI code number and will be asked to comply for such 8 employees only. Over the time if nobody is eligible then also you will be asked to submit the "NIL" Returns and comply.
This is the law position.
Take care.
regards
From India, Bangalore
One thing I would like to clear. On a methodical arrival of the law points based on your facts, firstly Architectural firms are not liable to regn under Factories Act. They should register under Shops Act. Secondly Architectural firms thus are liable for ESI coverage. The scheme says very simply that eligibility for ESI coverage is (a) if the entity is using elctricity for its work then it should have 10 people minimum for implementation of ESI, OR, (b) if the entity is not using any power at all then it should have 20 people for implementation of ESI scheme.
Over the years the clarity on the required number of people has been thrown by various court decisions and notifications and thus the figures 10 or 20 depict eligible workers.
THus eligibility of workers is decided on the salary. The present salary limit for ESI coverage is Rs.10000/-. So in cases of establishments using power they should have a minimum of 10 employees drawing Rs.10000/- or less. OR if not using power then they should have a minimum of 20 employees drawing Rs.10000/- or less.
Now lets come to the case of a establishment employing about 30 people in total of which they are having only about 08 employees drawing Rs.10000/- and below. In such a case they should submit the ESI registration form. In some Regions the ESI department has been found to send a Insurance Inspector to check the records and if found to be correct then give a certificate of non coverage. In some Regions the Department simply keeps quiet.
In case of establishment having only about 8 employees eligible for ESI but is employing through contract like security and housekeeping staff who are covered separately under ESI then the establishment will be allotted ESI code number and will be asked to comply for such 8 employees only. Over the time if nobody is eligible then also you will be asked to submit the "NIL" Returns and comply.
This is the law position.
Take care.
regards
From India, Bangalore
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