Factory means any premises including the precincts thereof whereon ten or more persons are employed or were employed on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952) or a railway running shed;

a) who is directly employed by the principal employer, on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or

b) who is employed by or through an immediate employer, on the premises of the factory or establishment or under the supervision of the principal employer of his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or

whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service;

ESI scheme is a contributory scheme, in which both Employers and Employees contribute as per the rates prescribed in the ESI (Central) Rules, 1950.  Contribution is the amount payable to the Corporation by the Principal Employer in respect of an employee and comprises the amount payable by the employee and the employer.  Employees’ contribution at present is 1.75 per cent of the wages whereas; the Employer’s Contribution is 4.75 per cent of the wages paid / payable in respect of every wage period.
In the first instance the Principal Employer is to pay employers’ share of contribution as well as employees’ share of contribution in respect of every employee whether employed directly or through immediate employer.  The employees’ share may thereafter, be recovered by making deduction from their wages for the wage period for which contribution was payable and not otherwise.
Employees earning Rs.70/- w.e.f. 01.08.2007 or less per day as wages are exempted from payment of their part of contribution.  Employers’ share of contribution is, however, payable.
Contribution in respect of arrears of Wages:- As and when any increase in the wages / remuneration is declared with retrospective effect, the liability towards payment of contribution accrues only in the month in which the decision is announced and no contribution is payable on the arrears pertaining to the period prior to the month of declaration / announcement.

Payment of Contribution :- Contribution payable under the Act shall, except when otherwise provided,be paid into a Bank duly authorised by the Corporation.

An employer who is liable to pay contribution in respect of any employee shall pay these contribution within 21 days of the last day of the calender month in which contribution fall due by filling up quadruplicate copies of the challan Form for deposit in A/C No.1 mentioning Employer's Code No. i.e. Regional Code-Alloted Code-Industrial Code(Regional Code of Sub-Regional Office Barrackpore is 40.)

Return of Contribution :- Every employer shall send a return of contribution in quadruplicate in Form 5 along with receipted copies of challans for the amounts deposited in the Bank,to the appropriate Office by registered post or messenger,in respect of all employees for whom contributions were payable in a contribution period,so as to reach that office-

                     (a) Within 42 days of the termination of the contribution period to which it relates;

                     (b) Within 21 days of the of permanent closure of the factory or establishment,as the case may be;

                     (C) Within 7 days of the date of receipt of requisition in that behalf from the appropriate office

The salient features of the revised format of the Return of Contribution (Form-5) are as under:-

• Self-declaration by Employers regarding maintenance of records and registers,submission of Declaration Form,distribution of TICs/PICs, no. of employees engaged directly or through immediate employers and wages paid to them.
  
• All the employers employing 40 and more no. of employees shall have to append a certificate duly certified by a Chartered Accountant,in the revised format of Return of Contribution.
• The employers employing less than 40 employees will have to provide self-certification without any certification from the Chartered Accountant in Return of Contribution.
• The four-digit New Code of the Service Dispensary/IMP should be mentioned against all the employees both in the Return of Contribution ('remarks' column) and in the CD ('dispcode' field). Employers may download the list of Service Dispensary ? IMPs from website or may obtain it from the concerned Branch Offices.

  *** to be added under Definition
  Manufacturing Process
  “Manufacturing Process” means any process for –

  1. Making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or
  2. pumping oil, water, sewage or any other substance; or;
  3. generating, transforming or transmitting power; or
  4. composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding;
  5. constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; (Inserted by the Factories (Amendment) Act, 1976, w.e.f. 26-10-1976)

   (vi)  preserving or storing any article in cold storage

   

This is to be produced before an Insurance Inspector or any other authorized Officer at the time of inspection etc.

Occupier of the factory shall have the meaning assigned to it in the Factories Act.

“Occupier” of a factory means the person who has ultimate control over the affairs of the factory.