THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952

An Act to Provide for the institution of provident funds, Pension Fund and deposit- linked insurance fund for employees in factories and other establishments.

Section 1(3) of the act defines the Eligibility criteria for EPF registration:

1. Establishment which is a factory engaged in any industry having 20 or more persons, and

2. To any other establishment employing 20 or more persons or class of such establishments which the Central Government may, by notification specify in this behalf.

3. An employee whose pay does not exceeds Rs. 15000/- per month.

Section 2(g) : “Factory” means any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power.

BENEFITS OF REGISTERING UNDER EPF SCHEME:

1. Accumulation plus interest upon retirement, resignation, death.

2. Partial withdrawals allowed for specific expenses such as house construction, higher education, marriage, illness etc.

3. An amount of deposit in provident fund is eligible for tax exemption under Section 80C of Income Tax Act,1961.

EPF contribution rates
Particulars Current Rate
Employer Share Difference of Employee share and Pension Contribution
Employee Share 12% /10%* of the wages

NOTE: 1*10% rate is applicable for

  • Any establishment in which less than 20 employees are employed.
  • Any sick industrial company and which has been declared as such by the Board for Industrial and Financial

 Reconstruction

  • Any establishment which has at the end of any financial year, accumulated losses equal to or exceeding its entire net worth and
  • Any establishment in following industries: –

Jute (b) Beedi (c) Brick (d) Coir and (e) Guar gum Factories.

2. The contributions are payable on maximum wage ceiling of Rs. 15000/-

3. For an International Worker, wage ceiling of 15000/- is not applicable.

THE EMPLOYEES’ STATE INSURANCE ACT, 1948

An Act to provide for certain benefits to employees in case of sickness, maternity and ‘employment injury’ and to make provision for certain other matters in relation thereto.

As per Section 2(12), the Act is applicable to non-seasonal factories employing 10 or more persons.

*Note: However the threshold for Coverage of establishments is still 20 Employees in Maharashtra and Chandigarh.

The wage limit for coverage under the Act effective from 01/01/2017 is Rs.21,000/- per month [Rs. 25,000/- per month in the case of persons with disability].

Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatres, road-motor transport undertakings, newspaper establishments, establishments engaged in Insurance Business, Non Banking Financial Companies, Port Trust, Airport Authorities and Warehousing establishments employing 10 or more persons.

Further under Section 1(5) of the Act, the Scheme has been extended to Private Medical Institutions, Educational institutions and to contract and casual employees of Municipal Corporation/Municipal Bodies employing 10* or more persons in certain States/UTs.

BENEFITS OF REGISTERING UNDER ESIC SCHEME:

1. Full medical care is provided to an Insured person and his family members from the day he enters insurable employment.

2. Sickness Benefit in the form of cash compensation at the rate of 70 per cent of wages is payable.

3. Maternity Benefit for confinement/pregnancy is payable for Twenty Six weeks.

4. If the death of the employee happens while on work – 90% of the salary is given to his dependents every month after the death of the employee

5. Funeral expenses and Old age care medical expenses.

6. Expenses in case of disability of the employee.

ESIC contribution rates (w.e.f. 01.07.2019)
Particulars Current Rate
Employer Share 3.25% of the wages
Employee Share 0.75% of the wages
Total 4%

NOTE: Employees in receipt of a daily average wage upto Rs.137/- are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.

Registration for EPFO & ESIC for NEW Public & Private Limited Companies and One Person Company has been stopped on Shram Suvidha Portal from 15.02.2020. 

Registration is only available through MCA portal (www.mca.qov.in through Spice+ and AGILE-PRO e-forms) only at the time of incorporation. 

However, the above new companies will have to comply with the provisions of EPF & MP Act, 1952, and ESI Act, 1948 when they cross the threshold limit of employment under the respective Acts.

Shram Suvidha Portal is an ‘Ease of Doing Business’ Labour Law Reform initiative by Ministry of Labour & Employment, Government of India. It was launched on 16 October 2014 with a facility to get all kinds of registrations and submit returns in context of labour laws at a single online window.

Before that Registration of PF and ESIC used to happen on their particular website only.

You can take a common registration for both PF and ESIC at unified Shram Suvidha Portal.

1. Firstly, you must create an account in the name of applicant on portal.

2. Then click tab ‘Under EPF-ESIC Registration’ which is given on right side.

3. An application for registration will appear, fill all necessary details and submit the application.

4. DSC or E-Signing is required for Final submission.

5. You’ll get a registration mail along with your Login Credentials on your registered Mail-ID.

DOCUMENTS REQUIRED FOR COMMON REGISTRATION

1. Copy of registration certificate or licenses in name of company.

2. PAN Card of the Business Entity as well as all the Employees working under the entity.

3. Number of Employees and their details

4. Primary Business Type of entity.

5. A Specimen of Signature.

6. Digital Signature.

7. Scanned copy of cancelled Cheque

8. Proof of Address of business entity.

9. Setup Proof

10. Licence Proof

11. Lease deed if Hired/Rented/leased

Note: No physical documents are to be submitted to EPFO and ESIC office for registration and also no physical visit is required. All the documents are to be uploaded online only at the time of filling application for registration. 

*****

Disclaimer:  This article is for informational purposes only and is intended, but not promised or guaranteed, to be correct, complete, and up-to-date. Whitespan Advisory does not warrant that the information contained in this article to be accurate or complete, and hereby disclaims any and all liability to any person for any loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or any other cause. 

Please feel free to contact the undersigned in case you require any further information/ clarification on the above article.

Atul Singh & Garima Bansalatul@whitespan.in – garima@whitespan.in

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4 Comments

  1. Ankit says:

    Can two pf registrations be taken on same PAN?
    I had applied the same,i git esic but getting an error for pf wrt PAN.
    What should i do now?

    1. Whitespan Advisory says:

      If you have taken registration as an individual, then you cannot have two PF accounts with same PAN.

      However, if establishment, which have already a PF registration, can apply for branch code through form 2A on EPFO portal by the Establishment ID. New code will be generated with the same PAN, since it will be new establishment.

      However, one cannot take fresh new establishment code number on already registered PAN.

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