Dear All
We have appointed one Driver purely on Contractual basis and paying him a consolidated amount of Rs. 4000 pm. My. question here is; Is it necessary to provide him PF and ESI. Ours is a very new company and we have only two employees on contract. For only two employees, we dont want to register ourselves with PF & ESI Authorities. This driver is working with us for last 15 days. He is asking us to provide him the insurance. In my own opinion, it is a must to provide insurance to the Driver. But is it also legally right?
Please guide me.
regards,
priyanka
From India, Mumbai
1We have appointed one Driver purely on Contractual basis and paying him a consolidated amount of Rs. 4000 pm. My. question here is; Is it necessary to provide him PF and ESI. Ours is a very new company and we have only two employees on contract. For only two employees, we dont want to register ourselves with PF & ESI Authorities. This driver is working with us for last 15 days. He is asking us to provide him the insurance. In my own opinion, it is a must to provide insurance to the Driver. But is it also legally right?
Please guide me.
regards,
priyanka
From India, Mumbai
Hi Priyanka..
If the number of employees is more than 20 in your organisation, then you are required to register your organisation with ESI and PF.. it is mandatory.
If it is less then no need to register your organisation for the same..
Meanwhile you may provide him Health cards.. which premium is very less approx rupees 400/- for a year of amount 25000/-.
Regards,
Amit Seth.
From India, Ahmadabad
If the number of employees is more than 20 in your organisation, then you are required to register your organisation with ESI and PF.. it is mandatory.
If it is less then no need to register your organisation for the same..
Meanwhile you may provide him Health cards.. which premium is very less approx rupees 400/- for a year of amount 25000/-.
Regards,
Amit Seth.
From India, Ahmadabad
Hello Amit,
As I know:
PF is mandatory if there are more than 20 employees drawing below 6500 Basic + DA.
ESI is mandatory if there are more than 10 employees drawing below 10000 Gross (includes all pay components)
If there are 50 people in the organization and all are drawing more than Rs. 10000, then neither PF nor ESI would not be applicable.
As in the above case there are only 2 people drawing around Rs. 4000/-, PF and ESI would not be applicable.
Health Cards are a very good option in this case.
regards
Girish
As I know:
PF is mandatory if there are more than 20 employees drawing below 6500 Basic + DA.
ESI is mandatory if there are more than 10 employees drawing below 10000 Gross (includes all pay components)
If there are 50 people in the organization and all are drawing more than Rs. 10000, then neither PF nor ESI would not be applicable.
As in the above case there are only 2 people drawing around Rs. 4000/-, PF and ESI would not be applicable.
Health Cards are a very good option in this case.
regards
Girish
Thanks Amit and Girish
The option of health card is really good. Can u pls suggest me from which company we can get these health cards @ Rs. 400 pa premium. Should we contact some insurance company like Baja Allianz or ICICI Prudential etc.
regards,
Priyanka
From India, Mumbai
The option of health card is really good. Can u pls suggest me from which company we can get these health cards @ Rs. 400 pa premium. Should we contact some insurance company like Baja Allianz or ICICI Prudential etc.
regards,
Priyanka
From India, Mumbai
Hi Priyanka,
Pls find below the definition on applicability of ESI/ PF, if your company engaged more than 20 employees on any day in a calender year, then your co. has to be covered under the ESI/ PF. In case your nos. are less than 20, and you still want to cover the contract labour, better engage a contractor who has registered with the above provisions and transfer your contract labours.
(3) Subject to the provisions contained in section 16, it applies, -
(a) to every establishment which is a factory engaged in any industry specified in Schedule I and in which [twenty] or more persons are employed, and
(b) to any other establishment employing [twenty] or more persons or class of such establishment which the Central Government may, by notification in the Official Gazette, specify in this behalf :
PROVIDED that the Central Government may, after giving not less than two months notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than [twenty] as may be specified in the notification.
(4) Notwithstanding anything contained in sub-section (3) of this section or sub-section(1) of section 16, where it appears to the Central Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the amployer and the majority of employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment, he may by notification in the official Gazette, apply the provisions of this Act to the Establishment on and from the date of such agreement or from any subsequent date specified in such agreement.
(5) An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of person employed therein at any time falls below twenty
Rgds,
Suresh Ramalingam
From India, Mumbai
Pls find below the definition on applicability of ESI/ PF, if your company engaged more than 20 employees on any day in a calender year, then your co. has to be covered under the ESI/ PF. In case your nos. are less than 20, and you still want to cover the contract labour, better engage a contractor who has registered with the above provisions and transfer your contract labours.
(3) Subject to the provisions contained in section 16, it applies, -
(a) to every establishment which is a factory engaged in any industry specified in Schedule I and in which [twenty] or more persons are employed, and
(b) to any other establishment employing [twenty] or more persons or class of such establishment which the Central Government may, by notification in the Official Gazette, specify in this behalf :
PROVIDED that the Central Government may, after giving not less than two months notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than [twenty] as may be specified in the notification.
(4) Notwithstanding anything contained in sub-section (3) of this section or sub-section(1) of section 16, where it appears to the Central Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the amployer and the majority of employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment, he may by notification in the official Gazette, apply the provisions of this Act to the Establishment on and from the date of such agreement or from any subsequent date specified in such agreement.
(5) An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of person employed therein at any time falls below twenty
Rgds,
Suresh Ramalingam
From India, Mumbai
Hi Priyanka..
Most welcome..
You can get that health card from New India Insurance. They are providing the same at this rate.. Allianz Bajaj is charging approx 1600/- Annum for rs. 1,00000/- one lakh...
Regards,
Amit Seth.
From India, Ahmadabad
Most welcome..
You can get that health card from New India Insurance. They are providing the same at this rate.. Allianz Bajaj is charging approx 1600/- Annum for rs. 1,00000/- one lakh...
Regards,
Amit Seth.
From India, Ahmadabad
Hi,
In case of contract labour, the best option is to go for outsourcing by paying minimum service charges to the agency. I would suggest you put the two contracted person to an external agency's role which has a Proper ESI and PF registration, by doing that you will be safe from any mishappening in future.
In case you keep them on contractual roll and making payment to them by voucher, then your company is liable to pay for any mishappening.
Thanks
Kapil Khera
From India, Delhi
In case of contract labour, the best option is to go for outsourcing by paying minimum service charges to the agency. I would suggest you put the two contracted person to an external agency's role which has a Proper ESI and PF registration, by doing that you will be safe from any mishappening in future.
In case you keep them on contractual roll and making payment to them by voucher, then your company is liable to pay for any mishappening.
Thanks
Kapil Khera
From India, Delhi
Thanks a lot Amit
Hi, Kapil. You are right. We should take two persons from outside contractor only. But here the problem is that Contractor can provide the driver but they are not reliable. We have our own Driver who is performing well and is much reliable. We dont want to take any driver from Outside contractor. And also dont want our Driver to be registred with Outside contractor as they pay very less then waht is shown on the papers. But for other positions like office boys or housekeeping jobs, we will definitely go for Outside contract.
If we are taking a person as office attdt or Driver purely on Our company's Contract basis and paying them by cheque consolidated amount per month, and if both of them are interested in PF & ESIC, Can we deduct the same from thier pay. Is it necessary to get ourselves registered with PF Authority, Can't we handle it on our own.
thanks and regards,
priyanka
From India, Mumbai
Hi, Kapil. You are right. We should take two persons from outside contractor only. But here the problem is that Contractor can provide the driver but they are not reliable. We have our own Driver who is performing well and is much reliable. We dont want to take any driver from Outside contractor. And also dont want our Driver to be registred with Outside contractor as they pay very less then waht is shown on the papers. But for other positions like office boys or housekeeping jobs, we will definitely go for Outside contract.
If we are taking a person as office attdt or Driver purely on Our company's Contract basis and paying them by cheque consolidated amount per month, and if both of them are interested in PF & ESIC, Can we deduct the same from thier pay. Is it necessary to get ourselves registered with PF Authority, Can't we handle it on our own.
thanks and regards,
priyanka
From India, Mumbai
Hi,
your concern is valid, but there are some good agencies you can tie up. What you can do, ask the agency to pay the same salary what you are paying to the driver and charge some service charges on the salary amount.
About the PF and ESI issue, it is not correct to deduct PF and ESI from the salary unless and until you are registered, it will create a legal problem against your company.
I would still suggest you call any good agency and discuss the current salary with them and ask them to make a proposal for you on the same salary.
Thanks
Kapil Khera
From India, Delhi
your concern is valid, but there are some good agencies you can tie up. What you can do, ask the agency to pay the same salary what you are paying to the driver and charge some service charges on the salary amount.
About the PF and ESI issue, it is not correct to deduct PF and ESI from the salary unless and until you are registered, it will create a legal problem against your company.
I would still suggest you call any good agency and discuss the current salary with them and ask them to make a proposal for you on the same salary.
Thanks
Kapil Khera
From India, Delhi
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
APPROVAL, CONTRACTUAL EMPLOYEES.doc
ESI Covered Employees given the option of maintaining the membership after Crossing the Celiling.pdf