DETERMINATION OF ESI CONTRIBUTION IN CASES OF EXCLUSIVE LABOUR CHARGES: The Employees' State Insurance Corporation (ESIC) mandates contributions on wages paid to employees, including those engaged through contractors or immediate employers. In cases where the amount paid to immediate employers/contractors consists exclusively of labour charges, specific guidelines apply for determining the wage element for ESIC contributions. 1. GENERAL PRINCIPLE When payments made to contractors or immediate employers include only labour charges, the entire amount is subject to ESIC contributions. The principal employer is responsible for ensuring compliance and proper record-keeping regarding these payments. 2. FAILURE TO PRODUCE RECORDS If the principal employer fails to provide relevant records indicating the precise labour component of the payments: 60% of the total booked amount may be treated as the wage element for determining ESIC contributions. This estimation applies only as a one-time concession. The same employer will not be granted this concession again on subsequent occasions. 3. COMPLIANCE REQUIREMENTS Maintain clear and detailed records of payments made to contractors/immediate employers, including wage breakdowns. Ensure contractors are registered with ESIC and have an ESIC code number to avoid compliance burdens. If difficulties arise in determining the wage component, seek guidance from the Regional Director to avoid reliance on estimated contributions.