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Coverage of factory/establishment

The Act, in the first instance, applies to all non-seasonal factories using power and employing ten or more persons, and, to non-power using manufacturing units and establishments employing 20 or more persons for wages and falling within the scope of an implemented geographical area. As of now, employees of factories/ establishments, that fall within the ambit of coverage, and earning wages not exceeding Rs. 15,000/- per month are covered under the ESI Scheme (wef 1st May 2010). 

for employer 

The provisions of the ESI Act, have also been extended to the following classes of establishments under Section 1(5) of the Act.

Under Section 1(5) of the ESI Act, the Appropriate Govt. is empowered to extend the Scheme to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise. Thus, a State Government may extend the provisions of the Act in consultation with the ESI Corporation, and with the approval of the Central Government, after giving six months notice of its intention in the official gazette; provided that where the provisions of this Act have been brought into force in any part of State, the said provisions shall stand extended to any such establishment or class of establishments within that part if the provisions have already been extended to similar establishments or class of establishments in another part of that State.

Did you know?

A factory, or establishment once covered under the ESI Act, remains covered even if the number of employees at any later stage falls short of the stipulated number of 10/20 employees or the manufacturing process therein ceases to be carried on with the aid of power.

  Definitions
  Factory
  Seasonal Factory
  Employee
  Manufacturing unit
  Wages
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