Employees' Provident Funds Misc. Provisions Act & Schemes
Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment.
- Every establishment which is a factory engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed.
- Any other establishment employing 20 or more persons which Central Government may, by notification, specify in this behalf.
- Any establishment employing even less than 20 persons can be covered voluntarily u/s 1 (4) of the Act.
Liable to be arrested without warrant being a cognizable 2ji offence. Defaults by employer in paying contributions or ^^2i|H7 inspection/adminis tra tive charges attract imprisonment upto 3 years and fine upto Rs. 10,000 (Sec. 14). For any 15 "r retrospective application, all dues have to be paid by employer with damages upto 100% of arrears.
Payment of Contribution
- The employer shall pay the contribution payable to the EPF, DLI and Employees' Pension Fund in respect of the member of the Employees' Pension Fund employed by him directly by or through a contractor.
- It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, DLI and Employees' Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.
Employees covered enjoy a benefit of Social Security in the form of an un-attachable and un withdrawable (except in severely restricted circumstances like buying house, marriage/education, etc.) financial nest egg to which employees and employers contribute equally throughout the covered persons' employment.
This sum is payable normally on retirement or death. Other Benefits include Employees' Pension Scheme and Employees' Deposit Linked insurance Scheme
Clarification about Contribution
Alter revision in wage ceiling from Rs. 5000 to Rs. 6500 w.e.f. 1-6-2001 per month, the government will continue to contribute 1.16% upto the actual wage of maximum Rs .6500 per month towards Employees' Pension Scheme. The employer's share in the Pension Scheme will be Rs. 541 w.e.f. 1-6-2001.
Under Employees' Deposit-Linked Insurance Scheme the contribution of 0.50% is required to be paid upto a maximum limit of < Rs. 6500. The employer will pay administrative charge & 0.01% on a maximum limit of Rs. 6500.
The employer will also pay administrative charges @ 0.01% on maximum limit of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid
The above clarification is given by taking wages upto a maximum of Rs. 6500 towards wage (basic + DA).
Since an excluded employee i.e. drawing wages more than Rs. 6500 can also become member of the Fund and the Schemes on joint request and will, for instance, such an employee is getting Rs. 10,000 per month, his share towards provident fund contribution will be Rs. 1200 e.g. 12% and employer's share towards provident fund contribution will be Rs 659 and Rs.541 towards Employees Pension Fund.
Rates of Contribution
|Less than 2 months
|Two months and above but less than four months
|Four months and above but less than six months
|Six months and above
The Employees' State Insurance Act & The Scheme Checklist
Applicability of the Act & Scheme
Is extended area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and establishments employing 20 or more persons upto Rs. 6500/- per month. It has also been extended upon shops, hotels, restaurants, road motor transport undertakings. equipment maintenance staff in the hospitals.
Coverage of employees
Drawing wages (w.e.f. 1-10-2006) upto Rs. 1,00,007 - per month engaged either directly or thru' contractor.
Rate of Contribution of the wages
Manner and Time Limit for making payment of contribution
The total amount of contribution (employee's share and employer's share) is to be deposited with the authorised bank through a challan in the prescribed Form in quadruplicate on or before 21" of month following the calendar month in which the wages fall due.
Benefits to the employees under the Act
Medical sickness, extended sickness for certain diseases, enhanced sickness, dependants, maternity, besides funeral expenses, rehabilitation allowance, medical benefit to insured person and his or her spouse.
- Different punishments have been prescribed for different types of offences in terms of section 85:
(six months imprisonment and fine Rs. 5,000)
- (one year imprisonment and fine), and 85-A:
(five years imprisonment and not less to 2 years) and 85-C(2) of the ESI Act, which are self-explanatory Besides these provisions, action also can be taken under section 406 of the I PC in cases where an employer deducts contributions from the wages of his employees but does not pay the same to the corporation which amounts to criminal breach off
The Esi Scheme Today
|No. of implemented Centers
|No. of Employers covered
|No. of Insured Persons
|No. of Beneficiaries
|No. of Regional Offices/SRO's
|No. of ESI Hospitals/Annexes
|No. of ESI Dispensaries
|No. of Panel Clinics
Wages for Esi Contributions
Registers/fifes to be maintained by the employers
To be deemed as wages
- Basic pay
- Dearness allowance
- House rent allowance
- City compensatory
- Overtime wages (but not to be taken into account for determining the coverage of an employee)
- Payment for day of rest
- Production incentive
- Bonus other than statutory bonus
- Night shift allowance
- Heat, Gas & Dust allowance
- Payment for unsubstituted holidays
- Meal/food allowance
- Suspension allowance
- Lay off compensation
- Children education allowance (not being reimbursement for actual tuition fee)
NOT to be deemed as wages
- Contribution paid by the employer to any pension/provident fund
- Sum paid to defray special Daily allowance paid for the period spent on tour.
- Gratuity payable on discharge
- Pay in lieu of notice of retrenchment compensation
- Benefits paid under the ESI Scheme
- Encashment of leave
- Payment of Inam which does not form part of the terms of employment
- Washing allowance
- Amount towards reimbursement for duty related journey.
The ESI Benefits
Employees' State Insurance Act, 1946 Is the first major legislation on comprehensive social security for workers in Independent India. The Act envisages social protection of workers in conceivable exigencies such as deployed In organized sector of Independent India. The details of benefits, conditions for eligibility ana duration or benefits as follows:
1. Sickness Benefit (SB)
2. Disablement Benefit (DB)
3. Dependents Benefit
4. Maternity Benefit
5. Medical Benefit
6. Funeral Expenses
7. Vocational Rehabilitation
8. Physical Rehabilitation
The Employment Exchanges [Compulsory Notification Of Vacancies] Act, 1959
Object of the Act
To provide for the compulsory of vacancies to employment exchanges.
Applicability of the Act
By notification in the Official Gazette, appoint In this behalf for such State and different dates may be appointed for different Slates or for different areas of a State.
When Act is not applicable
- Any employment in agriculture, horticulture etc.
- Any employment in domestic service.
- Any employment, the total duration of which is less than three months.
- Any employment lo do unskilled office work.
- Any employment connected with the staff of Parliament.
Time limit for notification of vacancies and selection
- At least 15 days before the applicants will be Interviewed or tested.
- Employer to furnish the result of selection within 15 days
Submission of Returns
- Quarterly in Form ER-l
- Biennial Return in Form ER-ll
- Within 30 days by 30th June, 31st March, 30th September & 31st December
Notification of vacancies to Employment Exchanges
- Before filling up any vacancy as prescribed.
- Employer not obliged to recruit the person through employment exchange.
- To notify the vacancies to such employment exchanges as may be prescribed
Furnishing Information and returns
The employer in every establishment in public sector in that State or area shall furnish such information or return as may be prescribed in relation or vacancies that have occurred or are about to occur in that establishment, to such employment exchanges as may be prescribed.
- An employer contravening the provisions of Sec. 4(1) or (2).
- Fine upto Rs. 500 for first offence and for every subsequent offence fine Rs. 1000.
- If any person-
- Required to furnish any information or return Refuses or neglects to furnish such information or return.
- Required to furnish any information or return Furnishes or causes to be furnished any information or return which he knows to be false
- Required to furnish any information or return Refuses to answer, or gives a false answer to any question necessary for obtaining any information required to be furnished under section 5
- Impedes the right of access to relevant records or documents or the right of entry conferred by section 6; he shall be punishable for the first offence with fine upto Rs.250 and for every subsequent offence with fine upto Rs.500