About ESI and EPF
Employee State Insurance
Coverage – Act is applicable to non-seasonal factories using power and employing 10 or more persons and non-power using factories 20 or more persons.
Earning wages limit- Gross Salary Rs. 10,000/- w. e. f. 01.04.2006.
Contribution : By Employer @ 4.75%
By Employee @ 1.75%
Registration and number allotment– Duly filled Form-01
For Employees Form 01 & Declaration Form no. 03 within 10 days of joining, kept one copy of Form-3 for record.
Identity Cards : Form 4 the ESI Office will issue the same.
Register for ESI Record : Every employer shall maintain a register in Form-6 which is prescribed in rule-32.
Contribution periods 1st : 1st April to 30th September
2nd : 1st October to 31st March
Challans Deposit : Deposit in bank by 21st of every month.
Returns of contribution : On Form no. 5 in quadruplicate with Six Challans within or before 11 May & 12 Nov of every year mandatory certified by the Chartered Accountant if the member are 40 nos. or more w. e f. 01.04.2008.
Special Provision :
(i) Within 42 days of the termination of the contribution period to which it related.
(ii) Within 21 days of the date of permanent closure of the factory.
(iii) Within 7 days of the date f receipt of requisition in that behalf from the appropriate office.
Notice of Accident : As soon as practicable after the accident.
Maintenance of Accident Book : Form-15 any injury to an insured person.
Report to Accident :
- Immediately if the injury is serious. i.e. is likely to be cause to death or permanent disablement or loss of a member.
- In any other case within 24 hours after the receipt of the notice or when the accident came to his notice or to his foremen or other official under whose supervision the insured person was employed at the time of accident.
- If the injury result in the death at the place of employment, the report to IMO and Local Office should be sent through a special messenger.
Every Employer shall send a report in Form-16 to the nearest Local Office and to the nearest Insurance Medical Officer in triplicate i.e.
(1) One deposit to Local Office
(2) Second deposit to IMO
(3) Kept for their records.
Benefit Period : If the person joined insurable employment for the first time say 5th January, but his contribution period will be 5th Jan to 31st March and his corresponding first benefit will be from 5th October to 31st December.
|Sr. No.||To be deemed as a wages||Not to be deemed as a wages|
|Basic Allowance||Contribution paid by employer on any pension / PF or ESI|
|Dearness Allowance||Daily Allowance paid for period spent on tour|
|House Rent Allowance||Encashment of leaves|
|City Compensatory Allowance||Washing Allowance|
|OT Wages||Amount towards reimbursement for duty related journey|
|Production Incentive||Gratuity payable on discharge|
|Payment for day of rest||Benefit paid under ESI|
|Night Shift Allowance||Payment of Inam which does not form part of the terms of employment|
|Meal / Food Allowance|
Damages or contribution or any other amount due but not paid in time-
|Sr. No.||Period of delay||Maximum rate of damages in % per annum of the amount due|
|Less than 2 months||
|Grater than 2 but less than 4 months||
|Grater than 4 but less than 6 months||
|Grater than 6 months||
Penalties : Different punishment have been prescribed for different types of offences in terms of section 85 :
(i) Six month imprisonment and fine Rs. 5000/-
(ii) One year imprisonment and fine
And under section 85-A
(i) Five year imprisonment and not less than 2 years
And under section 85-C(2) of the ESI Act which are self explanatory
Besides these provisions, action also can be taken under section 406 of the IPC in case where an employer deduct contribution from the wages of his employees but does not pay the same to the corporation which amounts to criminal breach of trust
FREQUENTLY ASKED QUESTIONS
1) Who will be covered by the Pension Scheme?
Every member of the ceased Family Pension Scheme 1971 and anyone who joins any covered establishment on or after 16-11-95 is compulsorily to join this scheme, provided his/her salary/wage is less than Rs. 6500/- per month at the date of appointment.
2) What is a covered establishment?
Covered establishment is an establishment belonging to the class of industries / other establishments, which have been listed in the schedule appended to the Employees’ Provident Fund and Miscellaneous Provisions Act 1952 and where 20 or more persons are employed.
3) What are the eligibility criteria for taking the benefit of Employee Pension Scheme?
For getting the benefit of Employee Pension Scheme, an employee has completed to complete the age of 58 and have least 10 years of contribution in pension scheme.
4) Is employee the only beneficiary of Fund?
Benefit will be paid to him/her and in his/her absence to his/her family.
5) What is meant by Family?
Family means employees’ spouse and children below 25 years of age.
6) Suppose an employee does not have a Family and he/she dies before receiving benefit. Does his/her pension get lost?
No, if he/she does not have a family, benefits will be paid to his /her nominee, who will receive the benefit in his/her, absence.
11) Suppose member has not nominated anyone.
The pension / ROC will be paid to the dependent parents.
12) Can member change his/her nomination?
He/She can change his/her nomination whenever he/she decides within the framework of rules for such nomination. In other words if he/she has a family, nomination should be in favour of a member(s) of the family. If he/she has no family he/she can nominate anyone he/she wishes.
14) Employee is a member of Employees’ Pension Scheme. He/She has left employment at 48 yrs. of age and 8 yrs. of service. When shall he/she receive his/her pension?
He/She can take either withdrawal benefit or can take scheme certificate so that the 8 years service can be added to any future service that he / she may put in, in any other covered establishment. By virtue of being a holder of a scheme certificate, if the member dies before 58 years widow / widower and children shall be entitled for pension.
16) When does an employee become eligible to become a member of Employees’ Provident Fund Scheme, 1952 and Employees’ Deposit Linked Insurance Scheme, 1976?
An employee becomes a member of Employees Provident Fund (Employees’ Provident Fund) Scheme, 1952 / Employees Deposit Linked Insurance (Employees’ Deposit Linked Insurance) Scheme, 1976 immediately on joining an establishment covered under the Employees Provident Funds & Miscellaneous Provision Act, 1952.
17) What is nomination?
Every member has to give the details of himself & details of the nominee for Employees’ Provident Fund & Employees’ Deposit Linked Insurance Schemes and details of family for Employees Pension Scheme, 1995 in form no. 2.
A member if, is having a family can nominate any one or more persons to receive the Provident Fund on his death. In case of him having no family he can nominate any other person.
Family for the purpose of Employee Provident Fund Scheme’52 means wife/husband, children, whether married or unmarried, including adopted children, if adoption is recognized and dependant parents of member.
Employees Deposit Linked Insurance Scheme benefit will be paid to the nominee under Employees Provident Fund Scheme, 1952.
For the purpose of Employees Pension Scheme,1995 the member has to furnish the details, such as name, relationship & age of all the family members in the form no. 2. Family for the purpose of Employees Pension Scheme, 1995 means wife/husband & children. Whenever member wants to make a change in the nomination already made for Provident Fund, or to update the details of family for Employees Pension Scheme,1995, he has to send a revised form no. 2. The form no.2 is routed through the employer.
18) What are the periodical returns to be sent by an employer to the Provident Fund Office?
The employer of an un-exempted establishment has to forward the following returns. These returns will include details required under the three schemes namely, Employees Provident Fund Scheme, 1952, Employee Deposit Linked Insurance Scheme,1976 and Employee Pension Scheme, 1995.
The details of employees enrolled as members of Employees’ Provident FundS’52, Employees’ Deposit Linked Insurance’76 & Employees’ Pension Scheme’95 on coverage of the establishment- This is to be submitted immediately after coverage, within 15 days of coverage.
The details of the contributions recovered form the members & paid along with details of employers’ contribution & administrative charges- This is to be submitted monthly by 25th of following month.
The details of the employees enrolled newly to the Provident Fund- To be submitted along with Form-12A every month within 15 days of the following month.
The details of the employees leaving service during the month- To be submitted along with form-12A.
The triplicate copy of challans in token of having remitted the Provident Fund dues in the bank- to be submitted along with form-12A every month.
Nomination form- To be submitted along with form-5/9.
The details of wages & contributions in respect of each member, to be prepared financial year wise- To be submitted to the Provident Fund office by 30th of April every year.
Yearly consolidated statement of contributions- To be forwarded yearly along with form-3A. It should be ensured that all the form-3A are entered in form-6A, irrespective of whether the form-3A was forwarded for the broken period and the total dues as per the form-12A for the whole year agrees with the total of form-6A within 30th April.
Return of ownership of the establishment- To be forwarded immediately after coverage & whenever there is a change in the ownership, it has to be intimated with in 15 days of change.
j) Specimen signature:
Specimen signature of the officer/officers who are authorized to sign the returns/documents relating to Provident Fund forwarded immediately after coverage & whenever there is a change in
19) What is the procedure to be followed by the member if the employer is not attesting his claim forms?
It is the duty of the employer under the Act & Scheme to help Employees’ Provident Fund organisation to settle the Provident Fund dues of his employees. He has to complete the prescribed application within 5 days of receipt [para72(5)] forms & hand over it to the member when he leaves the service. When a member finds difficult to get the form attested by the employer, he can get the attestation of any of the following officer & send to the Provident Fund office
- Manager of a bank.
- By any gazetted officer.
- Member of the Central Board of Trustees./ committee/ Regional Committee (Employees’
Provident Fund Organization).
Magistrate/ Post/ Sub Post Master/ President of Village Panchayat/ Notary Public.
20) What is the mode of payment of Provident Fund and Employees’ Deposit Linked Insurance dues?
Provident Fund & Employees’ Deposit Linked Insurance dues is paid by money order/ by deposit in payees’ bank a/c/ through employer/ by depositing the cheque in payees’ name or part of amount in annuity scheme in any nationalised bank. Payment by money order is allowed where the amount is not more than Rs. 2000/-
21) What are the modalities to be followed for payment through cheque?
The member has to open an account in the nationalised bank, scheduled bank, urban bank or post office savings bank. He has to furnish the details of bank a/c no. with the full address of the bank in application form. An advance stamped receipt has also to be annexed in the form.
For receipt of pension member/claimant has to open an account only in State Bank of India or Punjab National Bank.
22) In case of returning of cheque what is the procedure to be followed?
Generally the cheques are returned by the bankers when the a/c number is furnished incorrect or a/c has been closed. On receipt of the cheque from the bankers the Provident Fund office will write to the member & employer about the fact & request them to intimate the bank, a/c number & detailed address. In case, the member comes to know about returning of the cheque before this, he can write to the Provident Fund office through his former employer regarding his present address & bank a/c number.
23) What is the time taken for disposal of the application in the Provident Fund office?
The claims received complete in all respects are disposed off within a maximum period of 30 days from the date of receipt of claims in the office. In case the member is not hearing anything about his application within 30 days, he can approach the Public Relation Officer.
24) What is the voluntary rate of Provident Fund contribution by the member?
As per the Act, the member has to contribute at the rate of 10% or 12% of his basic pay, D.A. & retaining allowance if any. In case the member wants to contribute more than this, voluntarily he can do so at any rate he desires. i.e. upto 100% of basic and D.A. But the employer is not bound to contribute at the enhanced rate.
Instructions for a member while sending application to Employees’ Provident Fund.
Instructions for a member while sending application to Employees’ Provident Fund Organization:
- Use the appropriate form for claiming Provident Fund Pension, withdrawal benefit/scheme certificate, Employees’ Deposit Linked Insurance benefit, etc. as given below :-
- Form-19 : To claim final settlement of Provident Fund by a member.
- Form-20 : To claim Provident Fund by nominee/legal heir on death of the member.
- Form-10-D : To claim pension. (In duplicate : If within state, In triplicate : If outside state.)
- Form-10-C : To claim withdrawal benefit/scheme certificate under Employees’ Pension Scheme ’95.
- Form-5IF : To claim assurance benefit under Employees’ Deposit Linked Insurance ’76 by nominee/legal heir of a member.
- Form-31 : To claim temporary withdrawal/advance under Employees’ Provident Fund scheme
- Form-13 : To effect transfer of Provident Fund/Pension from one A/C to another.
- Ensure that all columns of the application are filled completely.
- Information in the application form relating to name, a/c no. should agree with the details
available with Employees’ Provident Fund Organization; which were furnished by the employer at the time of enrolling to Provident Fund.
- Application should be signed by the member/claimant.
- It should be attested by the former employer. In case attestation by the former employer is not possible, it should be got attested by any other authorized official specified with application form.
- Application for final settlement can be sent by a member on completion of 2 months from the date of leaving service, if the reason for leaving service is other than superannuation, medical ground, retrenchment and V.R.S./ Female members getting married etc.
- Desired mode of payment can be given legibly, if the amount involved is more than Rs. 2000/-. The amount will sent by deposit in payees’ bank a/c. To facilitate this, Bank a/c no., name and address of the bank should be furnished. An advance stamped receipt should also accompany this application.
- Application may be supported by the return Form-10, showing the details of leaving service and details of contribution for the year in Form-3A, if not sent earlier by the employer.Specific additional requirements:A) Death cases:
- Nominee/legal heir should apply in Form-20 /Form-10-D /Form-5IF.
- If the member has not executed any nomination, application should be supported by certificate of family members issued by employer/revenue official/sworn in an affidavit by the family/ member/legal certificate from a court of law.
- Death certificate of the member.
Certificate of the employer stating whether the death was while in service of the member or not.
B) Pension cases:
- Joint photograph of member/spouse or the claimant should accompany the application.
- Option for return of capital/commutation should be specified clearly.
- Details of non-contributory period during the service, wages/salary for last 12 months should also accompany, if not already sent.
- Details of the branch of the specified bank may be given legibly.
- Date of birth certificates of children
In case of death away from service, an undertaking by the claimant to the effect that the member was not working / had not worked in any other covered establishment after exit from the establishment on the basis of which pension is being claimed.
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