Clarification On ESIC

Hi All,
Would like to have detailed information on ESIC. I have gone lot of articles on ESIC on Internet, however the terms used every where is so outdated that I am not able to relate it with my Current Organization.I am working for an IT Software Development Firm and would like to know:
1) to pay ESIC, what is the head count required, Is it 10 employees or 20 employees.
2) Also If the salary limit is 15K Gross for ESIC, Is there any rule that specific number of employees should be less than 15k and only then you have to pay ESIC.

Hi,
1) ESIC covers employees of non‐seasonal power‐using factories employing 10 or more persons and it has been extended to cover employees in non‐power using factories employing 20 or more persons.So we cant say wether its exactly 10 or 20 it depends upon the type of the organization.
2) Each and every employee who is drawing monthly gross salary less than or equal to 15,000 should be covered under the ESIC. irrespective of the number of employees working in your organization

Dear Prasad,
E.S.I.C. Means Employee State Insurance Corporation.
it covers each and every industries which is working with the manpower of minimum 10 and with the aid of power or employees minimum 20 without the aid of power.
Employees who are getting salary 15000 gross per month or less than that would cover under esic.
Contribution - 1.75 % from employees's gross salary and 4.75 % part from employer's side.
monthly returns and half yearly returns need to fill and now it is available online also.

Dear Prasad
Here I think your all doubt is clear but I think your one query is pending
I think You also want to know that if any organization have 20 or more employee but not all under 15000/-
So please understand where the 20 or more employees working. than registration under ESIC Act is mandatory.

Hi,
its 10 & above no are required for ESIC & below 15000 Salary all employees should be covered under that.

Dear Prasad

1) ESI Act was amended in 2010 and subsequent to amnedment, it coversthe following establishments;

a) Factories employing 10 or more pesons irrespective whether they are using power or not.

b) Establishments other than factories like commercial establishments located in union teritories and States can be covered by virtue of notification to be issued by eithr Central Government or by State Governments respectively. Thus to cover such establishments loacted in their territories, the Centarl Governments and State Governments have issued notifications before the amendment fof teh ESI Act. As per the notifications issued earlier, such establsihments shall consist of 20 or more employee to be covered by ESI Act.However it appears some state Govermnments have issued fresh notifications, after amendment, bringing down the number of employees of commercial establishments from 20 to 10 for the purpose of coverage. You need to check with the notification of your State.

2) Though only employees drawing wages of Rs15000/- or less are covered,it is not necessary in case of factories that all the ten employees shall draw wages of Rs.15000/- or less to cover the factory and it is enough if the factory employs ten or more persons.As regards establishments other than factories in this regard, you need to check your state notification.

B.Saikumar

Mumbai

Dear prasad.Rajput
1st of all please mention that from where your IT company is operated, because in some state the esic is applicable on 10 employees and in some state it is on 20 so first mention the location of operation,there are some non implement areas also there where ESIC is not applicable.
so 1st mention the place of business.
NIlesh Soni

If company taking a car on lease from third party @Rs.8000/-per month rent(Annual-96000/-)and giving to that Employee (XYZ).
Rs. 7500- For Driver salary and Rs.10500/- for Fuel Expenses & Car Maintenance Expenses .
Now If give the Reimbursement of Rs.7500/- as Driver Salary to that Employee (XYZ) thn who will be responsible to Deposit ESI contribution of Driver ?
Our Company ? That Employee (XYZ)? or No need to pay ESI Contribution by Anybody?
In case of any clarity you require on this plz let us know.
Thanks & Regards
Diwakar Jha
9582400117

Mr. Diwakar,
As per my knowledge the Employee share by that Driver(xyz) and Employer share by that third party but as a principal employer the responsibility of paying ESIC contribution both the share is of that company who is hiring the car.
Regards,
Vijay Dere

Dear Prasad ji,

You are in IT Software Development Firm.

Your query is on ESI, whether to your IT Software Development Firm the applicability of ESI is on 10 employees or on 20 employees and this 10 or 20 employees should be coverable or total head counts.

My answer to you query is as under:

IT Software Development Firm is a factory under the ESI Act.

Amendment 2010, Factory is defined in sec 2 (12) as "factory" means any premises including the precincts thereof whereon ten or more persons are employed or were employed on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 or a railway running shed;’.

According to Amendment 2010, the units where manufacturing activities are performed by 10 or more PERSONS has been brought under the ambit of the Act, irrespective of use of POWER and irrespective of the fact that 10 or more coverable employees are engaged or not.

Therefore, a criterion to you is 10 employees and not 20 employees and that too, head counts.

Hope you will find my reply up to your satisfaction.

You said in the beginning of your query that you have gone thru various articles on this topic and you got confused. Even I also was confused some time back. This was due to hidden amendment. Sec.1(4) read with Sec.2(12) unfolds that the ESI Act is applicable to factories where in ten or more persons are merely employed but does not say that they shall be employed 'for wages'.

My confusion / doubt was cleared by interaction in this forum. Thanks to this forum and the members who actively participates on such kind of issues.