ESIC Employee Limit to 50 from 20. Law not changed from 1948.

0 have signed. Let’s get to 500!

I am an Young Entrepreneur who entered into Manufacturing Sector with great high spirits of Make in India. We are a small Enterprise with Labor of 15-17 Employees. I thought Manufacturing needs a good Technical Skills, Investments and Good Market. But when I entered I came across this Heinous Labor Regulation which has not been changed since last 60 Years. There is labor Law which says if you have above 10 labor it is compulsory to register your employees under ESIC - "Employees' State Insurance" (Which adds 1.75% Cost of Salary to Employee and 4.75% Cost to Employer)  and if you have above 20 Employees then you have to register for EPF (12% Contribution of Employee as well as Employer). This law is continued from last so many decades and no government has ever felt need to check practicable validity of this law. Now this leads to a problem which is been suffered by thousands of Small Enterprise.  If the Number of Employees Increases to 20 or above for even a Day than it is mandatory to register for EPF (Employee Provident Fund). We as a Industry has rotational labor staff which changes from month to month sometimes even day to day. This type of labors are only concerned about their Daily wages and cannot contribute to PF as they are too naive to understand all this (As an result in ESIC also Employer's are also paying the Employee's contribution along with Employer's,   as this labors do not understand to Pay towards ESIC). Employers here get in a fix about what to do if employee count once in a while crosses 20. As Industry which is mainly unorganized mostly works in stiff market and if they ask this laborers to pay their EPF, they do not come for Job. And as an Industry it is not practical for any Employer to contribute both the Cost which is 24% of the Salary in EPF.   So alas we have to show employees below 20, even if it sometimes crosses 20.

Now then comes the Inspector Raj, according to the labor law when labor inspector comes at your enterprise at any point of time and found the labor count of 20 or more on that day then they start asking for bribe which we actually have to pay as we come in a legal fault. This leads to the unwarranted Stress due to corruption.

I atleast urge government to increase the ESIC employee limit to 50 instead 20 that will help us show actual strength of the Employees, that is even for a Day. This will also Help government to get more accurate Data from the Lakhs of Micro and Small Enterprises who at present are not showing accurate Data due to fear of government impractical labor laws which leads to unplanned cost escalation. Please understand that in labor oriented industry where Daily Wage Earners are mostly uneducated, it is very difficult to make them adher to this laws. And it also save the small enterprise as us with below 50 labors to safeguard from the Higher cost of PF.

Please let us altogether make Ministry of Labors and Employment understand this limit came into Picture during 1948. At that time Employee limit of 20 was understandable., here comes 2019 and same worker limit is coming into effect. Can we hold this Valid. 

BJP Government is working hard for ease of Business and we urge Government to take one more step in this law to make Factory Labor Laws more practical to follow. 

One another Point in ESIC is that at present Small Laborer who is Earning 6000 or above have to Pay Professional Tax of Rs. 80. That is Close to 1.5%. Why this limit still being continued which has been set before 40 Years. Have Income levels not increased. Is Government still considering Rs. 6000/- earning laborer a Highly qualified Laborer that government has to take Professional Tax from them.?

Here also cost have to be beared by employers adding to the Production Cost again as workers deny to pay professional tax as they do not receive any gain from it. Please increase the Professional Tax Limit to atleast Rs. 15000/- to make it more Practical.