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ESI and PF rules

alextekno Started The Discussion:

Hi,

We have got 2 firms (separate) and the employee details are as follows

1. IT Training firm

Total no: of employees is 8. Of this 7 are drawing less than 6500. Will ESI and PF be applicable?

2. S/w dev firm

Total no: of employees is 21. Of this 1 is less than 6500 and 4 are drawing between 6500 and 10000 and the rest all above 10000. Should we register for ESI and PF?

Some points regarding this.

a) The rule says 20 for not using power. IT firms use power. So is the no: 10 applicable for both the firms (for ESI & PF)?
b) If 20 is the count then can I put 2-3 from the s/w to the IT training firm rolls and escape both ESI and PF registration for the time being?
c) I heard that some firms take a written declaration from the employees saying that they do not need both ESI and PF. Is that valid?

Thanks in advance.

Warm regards,
Alex

rakeshmishra9 - Member Since: Feb 2008
For the 1st company as all employees are below 6500/-, both PF and ESIC will be applicable.

For the2nd company PF will be applicable for all employees, ESIC only to employees drawing 10,000/- and less. Employees drawing 10,001/- and above ESIC will not be applicable.

Rakesh Mishra

hr_salary - Member Since: Oct 2008
Hii Alex,
By rule for the first firm PF and ESIC are applicable.But as both the firms are yours definitely you can put some employees to the other firm and escape both.But be careful that accept resignation from the employees and then appoint them as afresh employee in other company.
As far as written declaration is concerned it not valid legally.Legally you need to have provisions for PF and ESIC for the employees who are having wage less than 6500

Regards
Raj

shhiju_p - Member Since: Oct 2008
ESI is applicable only those who have a salary(including all benefits and not take home amount)of more than Rs.10000 ie up to Rs.10000 no need to deduct ESI.But in the case of PF it is applicable only on Basic+DA and not any allawances if it is more than Rs.6500.

alextekno - Member Since: Aug 2008
Hi, Thanks for getting back. Hope you noticed that the 1st firm has less than 10 employees. Even then do I have to pay both ESI & PF? Do confirm. Alex

hr_salary - Member Since: Oct 2008
Dear Alex/shiju,
As Far As I Know Esi Is Only Applicable For Those Who Are Below 10000 And Upto 10000 And Not Above.the Employees Above 10k Mark Are Exempted From Both Pf And Esi.
Alex As Your 1st Firm Have Only 10 Employees Pf Is Not Applicable As Of Now.

Regards

Raj

alextekno - Member Since: Aug 2008
Hi Raj,

Thanks for getting back.

So for the 1st firm as it is less than 10 ESI is applicable and PF is not.
For the 2nd firm as it is more than 10 both PF & ESI is applicable but only for those who draw less than 10K.

Am I right?

For S/w development companies, is the count 10 or 20?

Alex

Nagaraj H V - Member Since: Nov 2008
Hi Dear friends i m Nagaraj H.V
i want to information about ESI

If Hospitals Facilities are provided for the workers within 15 kilometers radios of the organization weather such organization are exempted from the application of ESI Scheme.

knvsn - Member Since: Aug 2008
Alex
ESI is Not applicable to your both the firms.
With Power rule is for factories not for commercial Establishments.
So ESI is applicable to the establishments having 20 coverable employees under the act. So you dont have 20 coverable employees in both the organisations. For ESI present wage ceiling is Rs.10000/-
regards
SATYANARAYANA
99636 11511

ALEX
For 2nd Firm you need to cover under PF Act, if you want to reduce the PF burden you need not cover the employees who are drawing above 10000/-

regards
Satyanarayana
99636 11511

arathi.s - Member Since: Nov 2008
hi,

this is arathi...

can u pls let me know, if a person is going on maternity leave and if she is covered under ESI, she will get half of her salary paid by ESI till 3 months and company also will pay her full salary for 3 months.

am i rite?

warm regards
:-)



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