Hello everyone,
My question is about ESIC deductions. Is it compulsory to deduct ESIC from a temporary labor contractor's invoice if they provide services on labor charges, and the company submits omitted wages challan to the ESIC? However, the contractor's employees do not receive any benefits from this, leading the contractor to refuse to pay ESIC. What is the best practice in this situation? Please advise!
From India, Chennai
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My question is about ESIC deductions. Is it compulsory to deduct ESIC from a temporary labor contractor's invoice if they provide services on labor charges, and the company submits omitted wages challan to the ESIC? However, the contractor's employees do not receive any benefits from this, leading the contractor to refuse to pay ESIC. What is the best practice in this situation? Please advise!
From India, Chennai
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1. Sir, the ESI Act, 1948 does not make any distinction between temporary labor, casual labor, regular employees, or ad hoc employees. All persons doing work for and in connection with the work of the factory and within the wage ceiling are considered "employees" within the meaning of the said Act and are entitled to benefits. In case of any eventuality, such as in accident cases, on the premises of the employer where the ESI Act is applicable/in force, and in the course and out of employment, the injured employee is entitled to disablement benefits. Therefore, the employer or immediate employer (contractor) is required to comply properly as per the procedures laid down in the said Act or rules/regulations framed thereunder.
2. If the employer fails to maintain records in respect of his casual/temporary employees, then it reflects the outlook of the said employer or his contractor. Consequently, in case of any eventuality as mentioned above, the injured employee will face difficulties in obtaining the benefits as mentioned earlier. Furthermore, the employer will also be liable under another law, namely the Employees' Compensation Act, 1937.
From India, Noida
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9652. If the employer fails to maintain records in respect of his casual/temporary employees, then it reflects the outlook of the said employer or his contractor. Consequently, in case of any eventuality as mentioned above, the injured employee will face difficulties in obtaining the benefits as mentioned earlier. Furthermore, the employer will also be liable under another law, namely the Employees' Compensation Act, 1937.
From India, Noida
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Dear Mahender Singh,
It is the responsibility of the contractor to pay ESIC contributions of their employees. If the contractor denies paying the contribution, then it becomes the responsibility of the principal employer to ensure the ESIC contribution of the contractor's employees is submitted. In your case, you have submitted the omitted challan to the ESIC for labor charges. This is correct because during an ESIC audit, the ESIC inspector will inquire about labor charges. You can show the challan at that time to avoid penalties and interest for your company. This applies whether the contractor's employees are temporary or permanent.
Thank you.
From India, Delhi
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It is the responsibility of the contractor to pay ESIC contributions of their employees. If the contractor denies paying the contribution, then it becomes the responsibility of the principal employer to ensure the ESIC contribution of the contractor's employees is submitted. In your case, you have submitted the omitted challan to the ESIC for labor charges. This is correct because during an ESIC audit, the ESIC inspector will inquire about labor charges. You can show the challan at that time to avoid penalties and interest for your company. This applies whether the contractor's employees are temporary or permanent.
Thank you.
From India, Delhi
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(Fact Check Failed/Partial)-The user reply contains inaccuracies. According to the Employees' State Insurance Act, the responsibility of ESIC contribution payment lies with the contractor, not the principal employer. It is essential for the contractor to comply with ESIC regulations for their employees.
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Dear Mahendra You will have to pay ESIC even for temporary employees .
From India, Mumbai
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From India, Mumbai
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(Fact Checked)-The deduction of ESIC from temporary labor contractor invoices is mandatory, regardless of the employment type. It is essential to pay ESIC for all employees. (1 Acknowledge point)
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Is anyone aware of how to calculate ESIC if fixed work is given? For example, work is assigned to a contractor for XYZ purpose, and it is agreed that Rs. ABC will be paid. It is up to the contractor to decide how many people he wants to deploy for the same.
From India, Mumbai
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From India, Mumbai
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(Fact Check Failed/Partial)-The user reply is incorrect. ESIC deductions are mandatory for all employees covered under the Employees' State Insurance Act, regardless of the nature of their employment (temporary or fixed work). The calculation is based on the gross salary of the employees. The responsibility of ESIC contributions lies with the employer, not the contractor's employees.
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If I am. Your idea is to get the contractor's employees covered at the same time do not want the principal employer to get trapped. You can get the contractor a sub-code and remit the amount in that code. You can recover the employees as well as the contractor's contribution from his bill. Remember that with this PF will also get attracted.
From India, Chennai
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From India, Chennai
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(Fact Check Failed/Partial)-The response provided contains inaccuracies regarding ESIC deduction and contractor compliance. ESIC deductions are mandatory for contract labor. The suggestion to get a sub-code for the contractor and remit contributions is not a standard practice. Employers must ensure compliance with ESIC regulations without evasion.
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The contractor already having ESIC code to pay on same, otherwise to advise to get esi code for coverage.
From India, Madras
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From India, Madras
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(Fact Check Failed/Partial)-The reply is partially correct. It is important for the contractor to have an ESIC code for coverage, but the primary responsibility lies with the company to deduct ESIC from the contractor's invoice. Ensure proper compliance.
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CiteHR.AI
(Fact Checked)-The reply provided is accurate and aligns with the provisions of the ESI Act, 1948. Employees, regardless of their temporary or permanent status, are entitled to benefits under the ESI Act as long as they fall within the prescribed wage ceiling. The employer, including contractors, is obligated to comply with the Act to ensure proper benefits for all employees. (1 Acknowledge point)