The firm has 0 employees now. How to file ESIC and PF now?
From India, Bengaluru
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1From India, Bengaluru
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The ESI and EPF schemes are implemented through the respective laws only for the social security benefits of the employees. When an establishment suddenly becomes a no-employee establishment for whatever reason, the establishment automatically goes out of the purview of the respective Acts.
If it so happens in the part of the year, the employer has to check his compliance up to that period and intimate the authorities concerned about the fact. If the returns are to be filed, he has to file them up to the period of coverage.
From India, Salem
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If it so happens in the part of the year, the employer has to check his compliance up to that period and intimate the authorities concerned about the fact. If the returns are to be filed, he has to file them up to the period of coverage.
From India, Salem
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So, should the firm file nil returns for PF and ESI now? The firm is outsourcing all works and has no employees now. The owner is doing all works on her own and has never filed esi/pf for herself.
From India, Bengaluru
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From India, Bengaluru
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If the establishment is active with zero employees, then ESI/EPF will continue, and the establishment has to pay a minimum admin charge of 75/- per month in EPF. Similarly, ESI will also remain active. Both can only be surrendered in the case of permanent shutdown, after the disposal of the business and closure of the bank/surrender of the trade license. For safeguarding, send a letter to both departments stating that the establishment has no employees and will file no ECR in EPF or return in ESI. Ensure to assure that whenever they engage any employees, they will follow the procedures completely. Outsourcing jobs/employees is a questionable activity in the eyes of labor welfare departments, especially when the principal is registered under the respective acts.
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Thank you for your response, sir.
@Glidor Sir, PF nil return is possible, but how to file ESI nil return when there are no employees? Can you guide me regarding it? The company is active and outsourcing work as of now because it is not able to get laborers for work. So, it gave the entire work to a third party who does the work on fixed rates for many other companies.
Also, can you help me with what to write in the letters to be given to each department?
Additionally, does the owner need to file ESI/PF for herself? She has never done it for herself though.
From India, Bengaluru
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@Glidor Sir, PF nil return is possible, but how to file ESI nil return when there are no employees? Can you guide me regarding it? The company is active and outsourcing work as of now because it is not able to get laborers for work. So, it gave the entire work to a third party who does the work on fixed rates for many other companies.
Also, can you help me with what to write in the letters to be given to each department?
Additionally, does the owner need to file ESI/PF for herself? She has never done it for herself though.
From India, Bengaluru
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It is important for the safeguarding of the establishment to immediately inform both departments, as well as other concerned departments, that there is "zero" employment currently. Consequently, the establishment is not submitting the ECR under EPF and CR under ESI. An undertaking should be provided stating that all formalities will be maintained when recruiting any employee.
ESI challan cannot be generated with zero employees, but a direct challan of 75 is payable monthly for EPF. As a Principal Employer (PE), it is crucial to be cautious as both departments may oversee the establishment's operations.
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ESI challan cannot be generated with zero employees, but a direct challan of 75 is payable monthly for EPF. As a Principal Employer (PE), it is crucial to be cautious as both departments may oversee the establishment's operations.
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Sir, I did not understand the last sentence. If it means the vigilance department will check the third-party companies (X), then they are totally different companies with different owners. These third-party companies charge for handling the material and storing it in their godown, and they modify the material before dispatch. The 0 employee firm (A) has to just give details of the vehicles to X for storage purposes. The rest of the work is taken care of by X. (A) has no idea of the number of employees of (X) or if X follows the compliances or not. Since A was not getting labor after the lockdown for her work, she started giving material to X for work and hence removed all her employees because now X is doing her entire work by taking fixed charges, and she herself is doing other small paperwork.
From India, Bengaluru
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From India, Bengaluru
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PE is a registered entity in government welfare programs. Currently, the PE is displaying zero employees, but they are in working condition with the help of TP employees. Departments have to ensure that no employee is barred from receiving the benefits under which the PE is registered. In other words, these employees or persons are contract laborers for PE provided by the TP contractor, and they are eligible to receive all benefits under which the PE is registered (if not provided by the TP contractor).
We wish the establishment to restore their activities with their own employees at the earliest.
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We wish the establishment to restore their activities with their own employees at the earliest.
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The company is trying to restore manual labor workers, which were once available. Once these workers are back, the company will run at full capacity, requiring other employees to oversee them. The owner is not interested in continuing with TP (third-party) services because it is a more costly affair. She is actively searching for laborers but will manage with TP until then.
Additionally, the TP currently works for at least 40 companies, handling the storage and modification of materials in its warehouse. I have learned that the TP does not provide ESI or PF benefits (even though it has around 30 employees) because it has not faced any issues in the past 30 years. I am unsure if the 40 companies pay ESI/PF for the TP employees.
Please advise me on how to guide the company, which currently has 0 employees.
I now have a new question: How can all companies pay ESI/PF for TP employees? Is this possible?
From India, Bengaluru
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Additionally, the TP currently works for at least 40 companies, handling the storage and modification of materials in its warehouse. I have learned that the TP does not provide ESI or PF benefits (even though it has around 30 employees) because it has not faced any issues in the past 30 years. I am unsure if the 40 companies pay ESI/PF for the TP employees.
Please advise me on how to guide the company, which currently has 0 employees.
I now have a new question: How can all companies pay ESI/PF for TP employees? Is this possible?
From India, Bengaluru
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Principals stand liable for all workers, either direct or through contractors, for payment towards casual ancillary jobs such as electricians, plumbers, etc. Departments usually ignore the payments made, as they are very low in comparison to regular employees. However, as you mentioned in your reply, "Modification of materials" by the third party amounts to manufacturing under all respective laws and is considered a principal activity of the business. If the principal entity denies it, then GST will come into play and fix the liability of GST applicable on manufactured goods to the third party, which may lead to more complex issues.
It is advisable to get in touch with a local legal assistant or a Chartered Accountant (CA). They can analyze the situation and provide better guidance.
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It is advisable to get in touch with a local legal assistant or a Chartered Accountant (CA). They can analyze the situation and provide better guidance.
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