Employees Provident Fund and Employees State Insurance are two social security scheme availably to the working class in India. These are the central government schemes, comes under the jurisdiction of The Ministry of Labour and Employment. Both the schemes introduced with the objective to improve the working class condition. It’s the employer’s duty to register under both the schemes.
Employees Provident Fund is a saving fund that accumulates during the employment tenure of an employee. Its objective is to manage the provident fund of the government and private sector employees, helping them financially on their retirement.
Employees State Insurance is a self- financing social security and health insurance scheme offering medical and disability benefits to the Indian workers. It aims to provide medical and cash benefits to the employees and their families through their large network of offices, hospitals and dispensaries throughout the country.
EPF and ESI focus on undertaking the activities that ultimately provide social security to the members of the fund.
Who needs to register for EPF and ESI
EPF any establishment which is a factory engaged in any industry, with 20 or more employees. Employees having basic salary max up to Rupees 15000 + dearness allowance (if any) of every month. Establishments having employees less than 20 can also register under EPF only if both employer and employee are willing to do so.
ESI all the establishments which are covered units. Covered units include industry, hospital, restaurant, shop, theatre, pharmacy, hotel etc. In ESI employee strength shall be 10 or more. The wage limit of employees is maximum up to Rupees 21000 for ESI coverage.
Employers and Employee contribution for EPF
Employer and employee both will contribute equally. Employer pays 12% of the basic salary and the same is paid by the employee.
From the employer’s share of contribution, 8.33% is contributed towards the employer’s Pension Scheme and the remaining 3.67% is contributed to the EPF Scheme.
In case of a small establishment, the employer contributes 10% of the basic salary.
Employer and Employee contribution for ESI
Employer and Employee contribute different shares for ESI. Employer’s share is 3.25% of wages payable, employee’s share is 0.75% of wages payable. Total 4% is contributed to ESI.
EPF and ESI Compliance after registration
Once a commercial unit obtains EPF and ESI registration, the employer needs to complete the responsibilities of payment, challan return etc. And also keep the record updated on the web portal Shram Suvidha.
Due date for payment of EPF AND ESI
Payment must be paid by all the entities registered under EPF and ESI on or before the 15th of every month. After that penalty will be imposed on the employer.
Due date for Electronic Challan – Cum – Return
Provident fund return must be filed by all the entities registered under EPF and ESI on or before the 15th of every month.
EPF final return is due on the 25th April of the year ended on 31st March.
ESI return is filed Bi- annually
April to September before 11 November
October to March before 11 May
Penalty on late payment of ESI and EPF
Penalty, if delay in payment and that penalty depends upon the period of delay penalty starts from 5% to 25% of the amount. Payment should be paid before the 15th of every month.
Penalty of 12% per year interest for each day of delay in payment of contribution.
Determination of moneys due from the employer
In case where a dispute arise regarding the applicability of the EPF Act, that will be decided by the commission and also determine the amount due from any employer under any provision of the act.
Commissioner may conduct such inquiry as may deems necessary.
Commissioner means an officer for EPF appointed by the government.
The officer conducting the inquiry shall, have the same power as are vested in a court under the Code of Civil Procedure 1908, for trying a suit and also deemed to be a judicial proceeding as under Indian Penal Code 1860.
No order shall be passed without giving the reasonable opportunity of representing their case.
Remedies if ex-parte order passed
If an order is passed against the employer ex-parte, he may, within 3 months from the date of communication of such order, apply to the officer for setting aside such order and if he satisfies the officer that the show- cause notice was not duly served or that he was prevented by any sufficient cause from appearing when the inquiry was held.
The officer shall make an order setting aside his earlier order and shall appoint a date for proceeding with the inquiry.
Review of order passed by the commission
Any person aggrieved by the order made, but no appeal has been preferred under act, and who, from discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time of face of the record or for any other sufficient reason, desires to obtain a review to obtain a review of such order may apply for a review of that order to the officer who passed the order.
Application for review either accepted or rejected
No appeal shall lies against the order of the officer rejecting the review application, but an appeal lies against the order passed under review as if the order passed is the original order passed by officer.
Appeal to Tribunal
Any person aggrieved by a notification issued by the central government or by any order passed by the authority can prefer an appeal to a tribunal against such notification or order.
Every appeal shall be filled within time along with fees as prescribed.
Tribunal
A tribunal shall have the power to regulate its own procedure in all matters arising out of the exercise of its power or of the discharge of its function.
Orders of Tribunal
A tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such order thereon as it thinks fit, confirming, modifying or annulling the order appealed against or may refer the case back to the authority which passed such order with such direction as the tribunal may think fit, for a fresh adjudication or order, as the case may be after taking additional evidence, if necessary.
Any order made by the tribunal finally disposing of an appeal shall not be questioned in any court of law.
No appeal by the employer shall be entertained by the tribunal unless he has deposited with it 75% of the amount due from him as determined by an officer.
Deposit of 75% is the pre-condition for maintaining appeal.
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Disclaimer: The entire contents of this article have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy completeness, and reliability of the information provided, the author assumes no responsibility therefore. Users of this information agree that the information is not professional advice and is subject to change without notice. The author assumes no responsibility for the consequences of use of this information. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information
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