Surat's economy relies on millions of migrant workers (over 58% of the total population, mainly in textiles and diamond processing). These workers are often employed via contractors or masterji (job workers). Failure to register or accurately report these workers, especially due to high attrition or economic downturns, results in massive retrospective demands and penalties on the Principal Employer.

The Gujarat High Court has established that ESIC liability on a new factory arises only after the commencement of manufacturing operations, not during the preliminary construction or setup phase. This distinction is vital for the numerous new units establishing themselves in the Surat-Navsari industrial corridor and requires expert documentation.

We conduct a comprehensive Migrant Worker Verification and Registration Drive—using Aadhaar and other identity proofs—to ensure every temporary, casual, or contractor-supplied worker is assigned an ESIC IP Number and fully tracked through E-Challans. This directly addresses the Code on Social Security’s heightened emphasis on Principal Employer liability, which is especially critical in Surat’s high-turnover textile and diamond sectors.

We execute a mandatory Payroll Component Split to ensure that non-statutory allowances—such as HRA, conveyance, and other flexible components—do not exceed the statutory 50% limit of total remuneration, thereby preventing any retrospective escalation of ESIC and other social security costs. This transition future-proofs your payroll structure ahead of the New Wage Code’s implementation, safeguarding your organisation from sudden, large increases in the ESIC contribution base.