In Detail Employees State Insurance Act, 1948 and Employees Provident Fund Act, 1952 By Sarah Bhandari

Understanding about EPF

Employees’ Provident Fund- The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 is social welfare legislation to provide for the institution of Provident Fund, Pension Fund and Deposit Linked Insurance Fund for employees working in factories and other establishments. The Act aims at providing social security and timely monetary assistance to industrial employees and their families when they are in distress.

Applicability of the ACT In establishments where 20 or more persons (In case of cinema the number reduced to 5 or more) are employed under provisions of the Employee Provident Fund Act. It extends to the whole of India except the state of Jammu and Kashmir.

Eligibility of the Act: Not all the employee working for the establishments comes under the provisions of the Act, Employee whether skilled or unskilled getting salary up to Rs 15000 or less are eligible for membership of the fund:

  • Employees drawing pay exceeding 15000/- treated as excluded employees.
  • However, the said limit as per new proposed Employees Provident Fund Amendment ACT 2016 Employees with salary earning up to Rs. 25000 Per Month will be covered under EPF.
Payment of Dues & Return of Provident Fund- Employer is required to make the payment of EPF return and dues and file return on monthly basis on or before 15th of the following month.

In case of delay in payment of Dues, the employer shall be liable to pay simple interest at the Rate of 12% Per annum in respect of each day of delay or default in the payment of contribution.
An employee can check the amount available in their Provident Fund account using an online portal or through SMS or application.

Withdrawal of the amount- A member is eligible to apply for the withdrawal of his Provident Fund after completion of 2 months from the date of resignation from the establishment.

Now, the withdrawal made easy, employee can simply log in to EPF portal  and submit the form online without the signature of employer and employee on prescribed forms (Form 19 & 10C) According to the provisions of Section 192A which levies TDS on the amount is exceeding 50,000 and the period of service is up to 5 years, In case if employee furnishes Form 15G/H then no TDS will be deducted.
Employee State Insurance- The main focus of the ACT is to provide medical benefits to employees

The Employees’ State Insurance Act, 1948 provides an integrated need based social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, and death due to employment injury resulting in loss of wages or earning capacity. The Act also guarantees reasonably good medical care to workers and their immediate dependants.

Applicability of the ACT: Factories using power in the manufacturing process and employing 10 or more persons at any time during the financial year the factory/establishment shall make an application to the regional office within 15 days from the date on which this Act became applicable.
Eligibility of the Act: Employees of covered units and establishments drawing wages up to Rs. 21000 per month will cover under the provisions of the ESI Act 1948 for the Medical benefit. It extends to the whole of India.
Return and Contribution The employer shall deposit both employees, employer contribution as per specified rates* along with return within 21 days of the following month all employees shall get ESIC no by using an online portal. The present rate of contribution is *(4.75% and 1.75%) of workers’ wages by employers and employees respectively.

Common Portal and Documents Required:

There is a Common portal for ESI and PF registration i.e
Followings are the documents required for the registration through a common portal
  • Incorporation Certificate of the Company
  • Utility Bill
  • Rent Agreement (If Applicable)
  • Specimen Signature in PDF Format.

The appropriate government may exempt any factory/establishment from the purview of this Act (Employees’ State Insurance Act, 1948), as well as any person or class of persons employed in any factory/establishment, provided the employees employed therein are in receipt of benefits superior to the benefits under the Act.

Such exemption is initially given for one year and may be extended from time to time. The applicant has to submit application justifying exemption with full details and satisfy the concerned government.

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