21 July 2024
Yes, the Employees' State Insurance (ESI) Act, 1948 applies to trading and marketing companies (Private Limited) if they employ 10 or more employees on any day of the preceding 12 months. This includes both permanent and contractual employees.
Here are some key points regarding ESI applicability:
1. **Employee Threshold**: ESI is applicable if a company employs 10 or more employees (in some areas, the threshold might be 20 employees, so local regulations should be checked).
2. **Wages Limit**: ESI applies to employees earning wages up to Rs. 21,000 per month. Employees earning above this threshold are exempt from ESI contributions.
3. **Contribution**: Both the employer and the employee contribute towards the ESI fund at prescribed rates. The current rate of contribution is typically shared as a percentage of the wages payable to employees.
4. **Coverage**: ESI provides medical and cash benefits to employees and their families in case of sickness, maternity, disablement, or death due to employment injury.
Therefore, if your trading and marketing company (Private Limited) has more than 10 employees (or as per local regulations), it is likely that ESI registration and compliance would be required. It's advisable to consult with a qualified chartered accountant or a legal advisor familiar with labor laws to ensure compliance with ESI regulations specific to your location and circumstances.
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