Esi & Epf Applicability If Workers Work Only One Day Or Two Days

Dear Experts,

We are a construction company, and I am facing this issue here. Usually, our company hires workers like casual workers to work at the construction site. Though these workers work for 1 day, 2 days, or 5 days, they don't work like permanent workers, and they demand wages per day. My query is: should we comply with the joining formalities in the form of the engagement of these workers? Whether we should provide them ESI & EPF benefits even though they work for 1 day or 2 days.

Thanks in Advance,
MOHIT

If they are defined as employees and paid wages or salary, then it is mandatory to maintain all labor laws and pay contributions.

1. Sir, there is no option within your establishment to provide ESI or EPF benefits or not to persons engaged, even for a few days or just one day. The provisions are compulsory, and compliance is required to be made. The law, as laid down under the above Acts, namely the ESI Act of 1948 and the EPF & MPs Act of 1952, automatically applies if your unit has engaged the minimum number of persons as specified in the said Acts. In respect of the ESI Act of 1948, there is another condition that the area where the factory or establishment is located must be implemented under section 1(3) of the said Act.

2. There is no minimum qualifying period of service under the above Acts for a person to be eligible for coverage.

Dear Friends,

Kindly note that if he worked only for one hour, then he is eligible for ESI and PF.

Regards,
HR Alphonse
9443625359

If you are engaging any kind of employees other than Act apprentices, you need to comply with deducting PF and ESI, even if they work for only 1 hour. Without fail, you should obtain Form 2 duly signed by the employee on the day of engagement for work.

As already mentioned by other learned members, ESI and PF are applicable even if the employee has worked for a single day.

Both laws apply if a worker worked for a single day.

The question still arises whether they are employees or not. An electrician comes to do some job, completes it, and gets paid, but the accounting system debits the expense in the "repair and maintenance" category, not in wages or salary. Take the hint and try to run smoothly.

1. Sir, ESI Social Security Officer also verifies the Accounts Heads under the category of Repair & Maintenance, and in case any such charges are found to be paid, contributions are claimed on the said omitted wages from the employer.

2. The said department, in their records verification, generally verifies all expenses accounts heads. In whatever accounts heads such wages are found in the books, contributions are payable and demanded by the said department. The booking of expenses in any account is undoubtedly at the option of the employer, but the verification of records is done as per the instructions of the above department. The verification of records/accounts books/vouchers/bills is not restricted only to "Wages" accounts heads; rather, in the majority of cases, the Balance Sheet is also demanded by the said department.

Under such heads, AMC charges also come, for which the principal company pays ESI/EPF. Companies like Eureka Forbes and Otis take a plain bill from the worker, without man-count but on a job basis. If unverified, then only 20% to 30% is subjected to ESI (PF has no role in such matters).

You mentioned discussing the ESIC SSO inspection, which was abolished in 2007-08. There is no current system of regular inspection, but the CIAU conducts inspections based on pre-marked suspected concealment of employees' contributions. They do not investigate minor issues like repair and maintenance, conveyance, or labor welfare expenses.