Chandu 25 May 2018

Legal consequence if esi not paid on gross wage

If the Contractor do not pay ESI on gross wage ( Wage includes Minimum wages + DA + OT + Weekly off), what would be the legal / penal consequence for this

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Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 25 May 2018

Can give complaint to labour commissioner, Labour department at your place.

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 25 May 2018

Can give complaint to labour commissioner, Labour department at your place.

Chandu 25 May 2018

Would principal employer / occupier be penalised if Contractor do not make ESI remittance on Gross wages , if so under which sxection / rule ?

Pradipta Nath (Advocate) 25 May 2018

Under section 40 of the ESIC Act, the principal employer is primarily responsible to pay contributions in respect of every employee, whether directly employed by him or through an immediate employer.

It should ensure that both the employer's contribution and the employees' contribution are remitted. The Apex Court in the case of Employees' State Insurance Corporation v. Harrison Malayalam P. Ltd. , held that the principal employer should pay contributions on the appointed date in respect of employees directly employed by him or those employees employed by or through contractor, and that any delay in payment of contributions on the due date would attract all penal provisions contemplated in the Act, including levy of interest and damages, and once the default is made by the principal employer, in this regard, he cannot absolve himself of the responsibility for the delay and the consequential penalties like interest and damages.

Also under section 41 of the ESIC Act, the principal employer will be paying the contribution in the first instance and can recover the amount from the Contractor.

Sudhir Kumar, Advocate (Advocate) 26 May 2018

how are you connected to the matter.

Pradipta Nath (Advocate) 26 May 2018

Why it is not connected Sir?

Sudhir Kumar, Advocate (Advocate) 27 May 2018

Originally posted by : Chandu
	Would principal employer / occupier be penalised if Contractor do not make ESI remittance on Gross wages , if so under which sxection / rule ?

Yes. Principla employer is liable.

Kumar Doab (FIN) 27 May 2018

You can benefit from above. If you are from employer’s side you may handover the matter to legal cell or Labor Law Consultant engaged by establishment.