Dear Seniors,
I represent an 18 year old embedded company located in Bangalore with more or less 80 employees Head count. we have private insurance for all employees but not ESI.
Our organization have 21 employees under 10,000 CTC per month, which includes: Technicians, Office Assistants, Front office, Trainees, Apperntice employees. I have some doubts on ESI & hope you will help me in solving them..
1. Is ESI a mandatory for employees in an organization.
2. Trainees or apprentice eligible for ESI.
3. Any other alternative in place of ESI, as other corporate private Insurance.
4. what are the repercussions, if not followed with ESI act in the organization.
Looking forward to hear from you.
Regards,
Jagdish
From India, Bangalore
4I represent an 18 year old embedded company located in Bangalore with more or less 80 employees Head count. we have private insurance for all employees but not ESI.
Our organization have 21 employees under 10,000 CTC per month, which includes: Technicians, Office Assistants, Front office, Trainees, Apperntice employees. I have some doubts on ESI & hope you will help me in solving them..
1. Is ESI a mandatory for employees in an organization.
2. Trainees or apprentice eligible for ESI.
3. Any other alternative in place of ESI, as other corporate private Insurance.
4. what are the repercussions, if not followed with ESI act in the organization.
Looking forward to hear from you.
Regards,
Jagdish
From India, Bangalore
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
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
Thanks for clearing my doubts, I have two more query
on understanding:
1.what will be the employees salary slabs eligible for ESI in terms of gross/CTC (applicable in Bangalore/karnataka)
2.The minimum to maximum no of employees strength in an organization who are eligible for ESI
Hope you will clear my these doubts too..
Regards,
Jagdish
From India, Bangalore
on understanding:
1.what will be the employees salary slabs eligible for ESI in terms of gross/CTC (applicable in Bangalore/karnataka)
2.The minimum to maximum no of employees strength in an organization who are eligible for ESI
Hope you will clear my these doubts too..
Regards,
Jagdish
From India, Bangalore
The eligibilty for covering under the ESI, the Gross monthly Earning of the employee should be less than Rs.10000.00 (Not CTC).
APPLICABILITY OF THE ACT & SCHEME :
IS EXTENDED IN ARE WISE TO FACTORIES USING POWER & EMPLOYEEING 10 OR MORE PERSONS AND NON-POWER USING MANUFACTURING UNIT AND ESTABLISHMENT EMPLOYEEING 20 OR MORE PERSONS UP TO RS. 10000/-P.M. W.E.F. 1.10.2006 IT HAS ALSO BEEN EXTENDED UPON SHOPS, HOTELS, RESTAURANTS, ROADS, MOTOR TRANSPORT UNDERTAKING EQUIPMENT MAINTENANCE STAFF IN THE HOSPITALS.
From India, Delhi
APPLICABILITY OF THE ACT & SCHEME :
IS EXTENDED IN ARE WISE TO FACTORIES USING POWER & EMPLOYEEING 10 OR MORE PERSONS AND NON-POWER USING MANUFACTURING UNIT AND ESTABLISHMENT EMPLOYEEING 20 OR MORE PERSONS UP TO RS. 10000/-P.M. W.E.F. 1.10.2006 IT HAS ALSO BEEN EXTENDED UPON SHOPS, HOTELS, RESTAURANTS, ROADS, MOTOR TRANSPORT UNDERTAKING EQUIPMENT MAINTENANCE STAFF IN THE HOSPITALS.
From India, Delhi
HI FRIENDS,
whether ESI, PF, Gratuity are applicable to all type of company?
If no wat type of company should give those benefits to employees?
wat r all eligiblity criteria?
If the co., having less then 10 employees means wat r all benefits r applicable to employees? and friends guide me Is it CL, SL, PL and Medical Leave also applicable to all type of employment?
From India, Madras
whether ESI, PF, Gratuity are applicable to all type of company?
If no wat type of company should give those benefits to employees?
wat r all eligiblity criteria?
If the co., having less then 10 employees means wat r all benefits r applicable to employees? and friends guide me Is it CL, SL, PL and Medical Leave also applicable to all type of employment?
From India, Madras
For ESI applicability, I have given the same in my previous post.
For PF Act, a new amendment is there in the Act, that it will be applicable to the Industry with having 10 employee or more earlier it was for 20 or more employees. Content of the same are being produced below:
EPF Approved For Businesses With Ten Or More Employees
In a significant decision, government has approved the proposal for bringing businesses with ten or more employees under the realm of Employee's Provident Fund (EPF). Earlier, the limit was of twenty or more workers. There has been no decision on revising the rate of interest of the EPF corpus fund for the year 2008-09. Under the new decision, any business with ten or more employees will have to deduct EPF and make a matching contribution.
Source: 05-07-08 www.ptinews.com
For the Company having the Number od employee less than 10 Shop & Establishment Act is applicable.
You can refer to the Shop & Establishment Rules of your state for that.
From India, Delhi
For PF Act, a new amendment is there in the Act, that it will be applicable to the Industry with having 10 employee or more earlier it was for 20 or more employees. Content of the same are being produced below:
EPF Approved For Businesses With Ten Or More Employees
In a significant decision, government has approved the proposal for bringing businesses with ten or more employees under the realm of Employee's Provident Fund (EPF). Earlier, the limit was of twenty or more workers. There has been no decision on revising the rate of interest of the EPF corpus fund for the year 2008-09. Under the new decision, any business with ten or more employees will have to deduct EPF and make a matching contribution.
Source: 05-07-08 www.ptinews.com
For the Company having the Number od employee less than 10 Shop & Establishment Act is applicable.
You can refer to the Shop & Establishment Rules of your state for that.
From India, Delhi
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
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
Hi Usha,
The primarily responsibilty about the ESI payment lies on HR people.
HR is responsible making advice to Account department for ESI payment. Than submitting the same and get the ESI Challans collected after the clearance.
B'cos at the time of the ESI Inspection it is HR who will be held responsible for the ESI Compliance and not the Accounts Department.
From India, Delhi
The primarily responsibilty about the ESI payment lies on HR people.
HR is responsible making advice to Account department for ESI payment. Than submitting the same and get the ESI Challans collected after the clearance.
B'cos at the time of the ESI Inspection it is HR who will be held responsible for the ESI Compliance and not the Accounts Department.
From India, Delhi
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 Ofice 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 Regiostered, Afterwords You Have To The Contribution Both Employee And Employer With Heavy Penalty And Imprisonment To The Employer For Escaped From The Esi Act
From India, Hyderabad
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 Regiostered, Afterwords You Have To The Contribution Both Employee And Employer With Heavy Penalty And Imprisonment To The Employer For Escaped From The Esi Act
From India, Hyderabad
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
EPF that the trainees are apprentices. The ESI authorities are fully aware of this.
S. Krishnamoorthy
From United States, Roslindale
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