Dear Seniors,
We have appointed a new Canteen Contractor who provides lunch for us daily. However, he is not covered under ESI. He has four employees. How can I cover them under the ESI scheme? I want the contributions deducted in his bill to be paid in those four employees' names. I can't include them on my Company's payroll.
From India, Bangalore
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21We have appointed a new Canteen Contractor who provides lunch for us daily. However, he is not covered under ESI. He has four employees. How can I cover them under the ESI scheme? I want the contributions deducted in his bill to be paid in those four employees' names. I can't include them on my Company's payroll.
From India, Bangalore
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Hi Friend For 4 employees The contractor need not cover ESI, Since as per ESI ACT 10 or more employees working in a organization has to be covered under ESI.
From India, Pondicherry
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From India, Pondicherry
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If the main factory/establishment in which Mr. MUBASHIRA.S.M. is employed is covered or coverable under ESI Act, then the employees of the canteen, even though engaged through any contractor, are also to be covered, and compliance made under the said Act. The compliance is to be made as the compliance in respect of direct employees is made by the factory/establishment, though separate records can be maintained in respect of the said canteen contractor.
Even if the factory/establishment is employing fewer than 10 persons, and if by adding 4 contractor employees, the total strength becomes 10 or more persons, the said factory/establishment qualifies for coverage under the said Act, and compliance is to be made.
In respect of compliance to be made under the above Act and rules/regulations framed thereunder, there is no difference between direct/regular or casual or contractor employees. All are "employees" as defined under the said Act provided their wages are up to the wage limit as defined under the Rules/Regulations framed under the said Act.
Harsh Kumar Mehta.
From India, Noida
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Even if the factory/establishment is employing fewer than 10 persons, and if by adding 4 contractor employees, the total strength becomes 10 or more persons, the said factory/establishment qualifies for coverage under the said Act, and compliance is to be made.
In respect of compliance to be made under the above Act and rules/regulations framed thereunder, there is no difference between direct/regular or casual or contractor employees. All are "employees" as defined under the said Act provided their wages are up to the wage limit as defined under the Rules/Regulations framed under the said Act.
Harsh Kumar Mehta.
From India, Noida
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Respected Mr. MUBASHIRA.S.M,
Greetings.
As per the act, there is no need to cover 4 employees, but you still need to ensure they are covered under the ESI for ESI benefits. In this scenario, you can arrange for the canteen contractor to be registered under the ESI. Once registered, those 4 individuals will be covered and receive the ESI benefits.
For 10 or more workers, it is a compulsory obligation for the employer/contractor to provide ESI coverage. Even for fewer than 10 workers, you can still register, pay the EE and ER shares, and receive benefits from the ESIC.
You can now register online and subsequently submit the online-generated C-11 form to the regional ESIC branch manager. However, without registration and payment of shares to ESIC, you cannot deduct money from the contractor's bill under the ESI name. (You might be aware of this, but it serves as a reminder point.)
Please let me know if you need any further assistance or clarification.
From India, Hyderabad
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Greetings.
As per the act, there is no need to cover 4 employees, but you still need to ensure they are covered under the ESI for ESI benefits. In this scenario, you can arrange for the canteen contractor to be registered under the ESI. Once registered, those 4 individuals will be covered and receive the ESI benefits.
For 10 or more workers, it is a compulsory obligation for the employer/contractor to provide ESI coverage. Even for fewer than 10 workers, you can still register, pay the EE and ER shares, and receive benefits from the ESIC.
You can now register online and subsequently submit the online-generated C-11 form to the regional ESIC branch manager. However, without registration and payment of shares to ESIC, you cannot deduct money from the contractor's bill under the ESI name. (You might be aware of this, but it serves as a reminder point.)
Please let me know if you need any further assistance or clarification.
From India, Hyderabad
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Dear Bala, Harsh, and Ram,
Thanks for your immediate reply and sorry to say I am Ms. Yaar, not Mr. We usually deduct 6.5% for our contractors who work for us for 2 or more hours or a maximum of 1 or 2 days, for example, hamali work like loading, unloading, painting, etc. We pay the same amount as Miscellaneous or Labour Charges to ESI. In this case, the amount deducted will be from the bill amount, but the employees involved in the process will not receive any benefits. The issue is that the canteen employees will work with us for the whole month. I want only the 4 employees involved in the process to receive the benefits of ESI.
From India, Bangalore
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Thanks for your immediate reply and sorry to say I am Ms. Yaar, not Mr. We usually deduct 6.5% for our contractors who work for us for 2 or more hours or a maximum of 1 or 2 days, for example, hamali work like loading, unloading, painting, etc. We pay the same amount as Miscellaneous or Labour Charges to ESI. In this case, the amount deducted will be from the bill amount, but the employees involved in the process will not receive any benefits. The issue is that the canteen employees will work with us for the whole month. I want only the 4 employees involved in the process to receive the benefits of ESI.
From India, Bangalore
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Dear Naziya,
First of all, please confirm whether your establishment is covered under the Act, including these contract laborers as well. Secondly, check whether the canteen contractor's establishment is covered under the ESI Act. If the contractor is not covered, you may not be able to compel him to register his establishment. However, as clarified by Mr. Harsh Kumar Mehta, after including the contract laborers, part-time hamals, etc., if your establishment falls under the coverage, please register your establishment under the Act and remit the ESI contributions of all employees, including the contract laborers. You may recover the employer and employee contributions from the respective contractors' bills.
Once you are covered under the Act, you have to remit the actual contributions as prescribed under the ESI Act and not as miscellaneous or labor charges, and comply with all other statutory requirements such as maintenance of documents and filing of returns.
If the contractor's establishment is coverable, taking all his employees deployed in his establishment and in other firms on contract, you can insist on compliance under the ESI Act by him and seek documents thereof as a precondition of passing bills.
With best wishes,
From India, Mumbai
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First of all, please confirm whether your establishment is covered under the Act, including these contract laborers as well. Secondly, check whether the canteen contractor's establishment is covered under the ESI Act. If the contractor is not covered, you may not be able to compel him to register his establishment. However, as clarified by Mr. Harsh Kumar Mehta, after including the contract laborers, part-time hamals, etc., if your establishment falls under the coverage, please register your establishment under the Act and remit the ESI contributions of all employees, including the contract laborers. You may recover the employer and employee contributions from the respective contractors' bills.
Once you are covered under the Act, you have to remit the actual contributions as prescribed under the ESI Act and not as miscellaneous or labor charges, and comply with all other statutory requirements such as maintenance of documents and filing of returns.
If the contractor's establishment is coverable, taking all his employees deployed in his establishment and in other firms on contract, you can insist on compliance under the ESI Act by him and seek documents thereof as a precondition of passing bills.
With best wishes,
From India, Mumbai
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Guys,
If a contractor has only 4 employees, you can talk to another contractor in your company who can pay contributions for these 4 people, and you can reimburse his bills for the same.
Regards,
Mahendran.I
From India, Madras
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If a contractor has only 4 employees, you can talk to another contractor in your company who can pay contributions for these 4 people, and you can reimburse his bills for the same.
Regards,
Mahendran.I
From India, Madras
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When you start paying contributions for those four people, you have the risk of giving them an opportunity to claim permanency. When ESI is not an option, try complying with Employee Compensation Insurance available with many insurance companies. Alternatively, you can cover them in a personal accident policy or a mediclaim policy through the contractor, and the same can be reimbursed in his bills.
Note: Insurance and mediclaim cannot be used as a substitute for statutory compliance, but they solve the risk of accidents and other compensation that the employer has to shoulder responsibilities for.
Regards,
Mahendran.I
From India, Madras
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Note: Insurance and mediclaim cannot be used as a substitute for statutory compliance, but they solve the risk of accidents and other compensation that the employer has to shoulder responsibilities for.
Regards,
Mahendran.I
From India, Madras
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Dear Friends,
Sorry to post my reply to this issue. If you really know the legal status and applicability of the law, then you are most welcome. Otherwise, kindly don't give wrong opinions or statements to those who have posted their opinions. If you have any doubts or questions on applicable laws and provisions, kindly send your email to: info@vedaconsultants.com
Regards,
Veda Legal Resources Pvt. Ltd
Veda Management Consultants
Veda Team
From India, Madras
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Sorry to post my reply to this issue. If you really know the legal status and applicability of the law, then you are most welcome. Otherwise, kindly don't give wrong opinions or statements to those who have posted their opinions. If you have any doubts or questions on applicable laws and provisions, kindly send your email to: info@vedaconsultants.com
Regards,
Veda Legal Resources Pvt. Ltd
Veda Management Consultants
Veda Team
From India, Madras
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Mr .Veda, We would want to know which of those opinion in wrong. so that it cud be ignored. regards, Mahendran.I
From India, Madras
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From India, Madras
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I agree with the views expressed by Veda Team. I have already indicated in my remarks that the ESI Act makes no difference between contractor employees or regular employees. It is a system of social insurance and is compulsory, and some official is required to check the compliance made, and the principal employer is responsible for any failure of compliance.
It makes no difference if you cover the employees through personal medi-claim insurance or any insurance company since still compliance is to be made under the ESI Act. Further, compliance with ESI has no relation to the grant of permanent status to any contract employees.
With regards,
Harsh Kumar Mehta
From India, Noida
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It makes no difference if you cover the employees through personal medi-claim insurance or any insurance company since still compliance is to be made under the ESI Act. Further, compliance with ESI has no relation to the grant of permanent status to any contract employees.
With regards,
Harsh Kumar Mehta
From India, Noida
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Mr. Mahendran,
Just take a look at the post which has been posted by you.
When you start paying contributions for those 4 people, you have the risk of giving them an opportunity to claim permanency. When ESI is not an option, try complying with Employees' Compensation Insurance available with many insurance companies. Or you can cover them in a personal accident policy or a mediclaim policy through the contractor, and the same can be reimbursed in his bills.
Even the Supreme Court has given a very clear-cut judgment stating that a contract worker cannot claim permanency from the company based on ESIC & EPF contributions paid by the Company or principal employer. So then where is the question of permanency? How come ESIC can be an option in this case?
Thank you.
From India, Madras
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Just take a look at the post which has been posted by you.
When you start paying contributions for those 4 people, you have the risk of giving them an opportunity to claim permanency. When ESI is not an option, try complying with Employees' Compensation Insurance available with many insurance companies. Or you can cover them in a personal accident policy or a mediclaim policy through the contractor, and the same can be reimbursed in his bills.
Even the Supreme Court has given a very clear-cut judgment stating that a contract worker cannot claim permanency from the company based on ESIC & EPF contributions paid by the Company or principal employer. So then where is the question of permanency? How come ESIC can be an option in this case?
Thank you.
From India, Madras
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Dear sir, I want to know whether mother and father in law of women employee comes under definition of family under ESIC act. Rajneesh Kulshreshtha
From India, New Delhi
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From India, New Delhi
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Respected Rajneesh Kulshreshth,
These doubts will all be cleared if you file online monthly returns and upload new employee data to an online ESIC portal. Based on my experience with the ESIC portal (meaning this is the final judgment step determining if these individuals will receive benefits), if she didn't upload the spouse details, she can add her father and mother's names.
If a female individual uploads her spouse, then she can't upload her father and mother, meaning they won't receive the benefits. Here, she can upload her father-in-law and mother-in-law.
This is how the ESIC portal functions, and based on this, the ESI Pehachan card will be generated, and the ESI hospital will also operate accordingly.
From India, Hyderabad
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These doubts will all be cleared if you file online monthly returns and upload new employee data to an online ESIC portal. Based on my experience with the ESIC portal (meaning this is the final judgment step determining if these individuals will receive benefits), if she didn't upload the spouse details, she can add her father and mother's names.
If a female individual uploads her spouse, then she can't upload her father and mother, meaning they won't receive the benefits. Here, she can upload her father-in-law and mother-in-law.
This is how the ESIC portal functions, and based on this, the ESI Pehachan card will be generated, and the ESI hospital will also operate accordingly.
From India, Hyderabad
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Hi, Rajneesh Kulshreshtha
Clause (6A) of Section 2 of the ESI Act says that a “dependant” means any of the relatives of a
deceased insured person, namely :-
(i) *A widow, a minor legitimate or adopted son, an unmarried legitimate or adopted daughter;
(ia) widowed mother;
(ii) if wholly dependent on the earnings of the insured person at the time of his death, a legitimate or
adopted son or daughter who has attained the age of ** twenty five years and is infirm;
(iii) if wholly or in part dependent on the earnings of the insured person at the time of his death –
(a) a parent other than a widowed mother,
(b) a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or adopted or
illegitimate, if married and a minor or if widowed and a minor,
(c) a minor brother or an unmarried sister or a widowed sister, if a minor,
(d) a widowed daughter-in-law,
(e) a minor child of a predeceased son,
(f) a minor child of predeceased daughter where no parent of the child is alive, or
(g) a paternal grand parent if no parent of the insured person is alive.
* w.e.f. 1.6.2010, item (i) above has been changed to read, “A widow,a legitimate or adopted son who has
not attained the age of twenty five years, an unmarried legitimate or adopted daughter.”
** w.e.f. 1.6.2010
The Family excludes the following:
i) Married daughter even if minor,
ii) Minor brothers and sisters even if dependent,
iii) Parents who are not dependent,
iv) Grand children, even if dependent,
v Mother – in – law and father - in – law of an Insured woman even if dependent.[/COLOR]
Details of the scope of family have however been elaborated in the chapter III,
Medical Benefit, and should be kept in mind.
(c) New born babies: For the addition of new born babies in Family Identity Card, IP
has to apply to Local Office through his employer in the Form 1-B with in 15 days of
the birth.
(d) In case of death of IP, his family is entitled to Medical Benefit upto the date IP would
have continued to be entitled for the same if he had survived.
From India, Madras
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Clause (6A) of Section 2 of the ESI Act says that a “dependant” means any of the relatives of a
deceased insured person, namely :-
(i) *A widow, a minor legitimate or adopted son, an unmarried legitimate or adopted daughter;
(ia) widowed mother;
(ii) if wholly dependent on the earnings of the insured person at the time of his death, a legitimate or
adopted son or daughter who has attained the age of ** twenty five years and is infirm;
(iii) if wholly or in part dependent on the earnings of the insured person at the time of his death –
(a) a parent other than a widowed mother,
(b) a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or adopted or
illegitimate, if married and a minor or if widowed and a minor,
(c) a minor brother or an unmarried sister or a widowed sister, if a minor,
(d) a widowed daughter-in-law,
(e) a minor child of a predeceased son,
(f) a minor child of predeceased daughter where no parent of the child is alive, or
(g) a paternal grand parent if no parent of the insured person is alive.
* w.e.f. 1.6.2010, item (i) above has been changed to read, “A widow,a legitimate or adopted son who has
not attained the age of twenty five years, an unmarried legitimate or adopted daughter.”
** w.e.f. 1.6.2010
The Family excludes the following:
i) Married daughter even if minor,
ii) Minor brothers and sisters even if dependent,
iii) Parents who are not dependent,
iv) Grand children, even if dependent,
v Mother – in – law and father - in – law of an Insured woman even if dependent.[/COLOR]
Details of the scope of family have however been elaborated in the chapter III,
Medical Benefit, and should be kept in mind.
(c) New born babies: For the addition of new born babies in Family Identity Card, IP
has to apply to Local Office through his employer in the Form 1-B with in 15 days of
the birth.
(d) In case of death of IP, his family is entitled to Medical Benefit upto the date IP would
have continued to be entitled for the same if he had survived.
From India, Madras
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Dear Sir,
If your factory/establishment is in an ESIC coverage area, every employee who is drawing a salary up to Rs. 15,000 per month should be registered under the ESIC Act. However, your canteen contractor is not registered under the ESIC Act. It is advisable that you do not register all four canteen employees under your code number as they may claim to be your company's employees. They could potentially challenge this in court since all of them would be covered under your company code, making them legally your employees.
Recommendation: You should suggest to the canteen contractor to hire a third-party payroll service or outsource the payroll and enroll the canteen employees under their ESIC code. This way, both you and the contractor will be safe, and all employees will be properly enrolled under the ESIC.
Regards,
N. Dilip
Vidarbha Industries
Labour Law Consulting, Auditing, Payroll Outsourcing
Navi Mumbai
Cell: 86555 76111
Email: vidarbhaind@ymail.com
From India, Mumbai
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If your factory/establishment is in an ESIC coverage area, every employee who is drawing a salary up to Rs. 15,000 per month should be registered under the ESIC Act. However, your canteen contractor is not registered under the ESIC Act. It is advisable that you do not register all four canteen employees under your code number as they may claim to be your company's employees. They could potentially challenge this in court since all of them would be covered under your company code, making them legally your employees.
Recommendation: You should suggest to the canteen contractor to hire a third-party payroll service or outsource the payroll and enroll the canteen employees under their ESIC code. This way, both you and the contractor will be safe, and all employees will be properly enrolled under the ESIC.
Regards,
N. Dilip
Vidarbha Industries
Labour Law Consulting, Auditing, Payroll Outsourcing
Navi Mumbai
Cell: 86555 76111
Email: vidarbhaind@ymail.com
From India, Mumbai
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Hi, if we see from the angle of covering under ESI and administrative convenience, we may need to bear with heavy penalties and liability under the word compliance in case of any eventuality. Hence, advise the canteen contractor to register with ESI. This will protect your company and employer.
From India, Hyderabad
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From India, Hyderabad
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Hi MUBASHIRA.S.M,
You can pay the employees ESI contribution only (not PF) in your company's account, and the amount of 6.5% can be charged to the caterer. Since ESIC provides not only medical benefits but also covers hospital expenditure, and 50% of the salary is paid by ESIC in case of sick leave.
In a nutshell, it is better to be covered under the ESI act. Also, even if the employee leaves the job, he/she will receive six months of medical benefits.
Thanks,
B.V. RAGHUNATH
From India, Bangalore
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You can pay the employees ESI contribution only (not PF) in your company's account, and the amount of 6.5% can be charged to the caterer. Since ESIC provides not only medical benefits but also covers hospital expenditure, and 50% of the salary is paid by ESIC in case of sick leave.
In a nutshell, it is better to be covered under the ESI act. Also, even if the employee leaves the job, he/she will receive six months of medical benefits.
Thanks,
B.V. RAGHUNATH
From India, Bangalore
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Hi friends, thank you for your valuable reply. Please note that in our company, ESI is not applicable in our unit where I am working. One of our units is under the cover of ESI, located 40 km away from my present location. Can you guide me on how to pay ESI? Also, please provide guidance on all ESI-related tasks as I am unfamiliar with ESI and now have to handle it.
Our consultant is managing these activities, but they are not maintaining any records. I recently joined this company three months ago, so I am not familiar with these processes. Please advise me on what steps I should take. I wish to take over all ESI-related activities from the consultant. Kindly assist me. Please keep in mind that I have no prior knowledge of this act and process, so your help in this matter is crucial.
From India, Ahmedabad
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Our consultant is managing these activities, but they are not maintaining any records. I recently joined this company three months ago, so I am not familiar with these processes. Please advise me on what steps I should take. I wish to take over all ESI-related activities from the consultant. Kindly assist me. Please keep in mind that I have no prior knowledge of this act and process, so your help in this matter is crucial.
From India, Ahmedabad
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Hi Disha,
As per your first question, you have to enroll all employees of the unit which are in ESI coverage area and take Workmen Compensation Policy for all employees who are working in the unit not covered by ESI (you have to confirm first; otherwise, enroll all employees under ESIC).
Secondly, if you want to take over all compliance work from your consultant, obtain the password of ESI to file monthly contributions online, along with other related documents and records he has. You will have access to all records online that were handled by the consultant.
To proceed, visit www.esi.nic.in, the ESI website, log in using your 17-digit establishment code as the login ID and password, then click on 'file monthly contribution.' Enter the gross salary and worked days, click the submit button, a new window will appear, create a challan/pay online, choose your preferred option. If you encounter any issues, contact the nearest ESI office customer care/facilitation center.
Regards,
Dilip Nandanwar
Vidarbha Industries
(Labour Law Consulting, Payroll Outsourcing, Auditing, Contracting)
Navi Mumbai
Branch Office - Nagpur
Cell # 86555 76111
From India, Mumbai
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As per your first question, you have to enroll all employees of the unit which are in ESI coverage area and take Workmen Compensation Policy for all employees who are working in the unit not covered by ESI (you have to confirm first; otherwise, enroll all employees under ESIC).
Secondly, if you want to take over all compliance work from your consultant, obtain the password of ESI to file monthly contributions online, along with other related documents and records he has. You will have access to all records online that were handled by the consultant.
To proceed, visit www.esi.nic.in, the ESI website, log in using your 17-digit establishment code as the login ID and password, then click on 'file monthly contribution.' Enter the gross salary and worked days, click the submit button, a new window will appear, create a challan/pay online, choose your preferred option. If you encounter any issues, contact the nearest ESI office customer care/facilitation center.
Regards,
Dilip Nandanwar
Vidarbha Industries
(Labour Law Consulting, Payroll Outsourcing, Auditing, Contracting)
Navi Mumbai
Branch Office - Nagpur
Cell # 86555 76111
From India, Mumbai
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Dear All,
The same problem mentioned above occurred to me. I contacted ESI Top official, who advised me to add the canteen employees to my role and print out and hand over Form No.1. You should record the amount recovered from the vendor and the amount adjusted on the statement. If an employee leaves for another company, they should provide the necessary details. Otherwise, there is no way in the ESI software.
If you need any clarification, feel free to contact me.
Regards,
R. Manikandan
Asst. Manager - Human Resources
Kanchipuram
9788172983
From India, Chennai
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The same problem mentioned above occurred to me. I contacted ESI Top official, who advised me to add the canteen employees to my role and print out and hand over Form No.1. You should record the amount recovered from the vendor and the amount adjusted on the statement. If an employee leaves for another company, they should provide the necessary details. Otherwise, there is no way in the ESI software.
If you need any clarification, feel free to contact me.
Regards,
R. Manikandan
Asst. Manager - Human Resources
Kanchipuram
9788172983
From India, Chennai
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