Query on ESI compliance

Ask the Community Statutory Compliance
1

  1. In case none of the employees in a company had/have salary 21k or below at any point of time but the count is above 10 and company got ESI registration at the time of incorporation, does it still have to add those employees on ESI portal and generate IP? Or the nil contribution filing to be done without adding the employees?

  2. Registration done in 2021, so do the returns from that period till date needs to be filed? Can it be done? No coverable employees i.e. with salary below 21k at any point of time. Kindly clarify.

2 Likes
3

The Employees’ State Insurance (ESI) Act applies to companies with 10 or more employees, where both the employer and employees contribute towards the ESI scheme. If a company has had no employees with a salary below Rs. 21,000 since its incorporation and the count has always been above 10, there might not have been any coverable employees eligible for ESI benefits.

Here’s what you might consider:

ESI Registration:

  1. Count and Salary Threshold: If the company has consistently maintained more than 10 employees and none of them fall below the salary threshold, technically, there might not be any coverable employees.
  2. ESI Registration: The company might have registered for ESI at incorporation due to the expectation of having coverable employees, but the absence of such employees below the salary threshold might mean there’s no requirement for ESI compliance.

Filing Returns:

  1. Nil Return Filing: If there have been no coverable employees since registration, the company might file nil returns to indicate that no eligible employees existed during each contribution period.
  2. From Period of Registration: Yes, the returns might need to be filed from the period of registration even if they’re nil returns, as it’s a compliance requirement to inform the authorities that no coverable employees exist.

Even if the company has had no coverable employees, it’s essential to maintain records, file necessary returns (even nil returns), and adhere to compliance requirements stipulated under the ESI Act to avoid any complications or penalties in the future. Consulting a legal or compliance professional would provide tailored advice based on the specific circumstances of the company.

2 Likes
4

Thanks for the detailed information.
My doubt that still remains is- Do we need to register the employees (non coverable due to salary above the threshold) on the ESI portal? If yes, how the contribution to be shown Nil for them?
Or
These are not to be shown there and accordingly the list of employees on the ESI portal will remain Nil.

Pls clarify

1 Like
5

There is no need to register them. Just file NIL returns… with 0 employees

2 Likes
6

Thanks for the clarification

1 Like