Trusted Labour Law Compliance for Indian Businesses

Contributions

Statutory rate of contribution is 12% of emoluments (basic wages, dearness allowance, cash value of food concession and retaining allowances if any).

PROCESS

1. Maintaining of salary details for legal compliance according to labor laws and for ESI Act

2. Filing of monthly returns

3. Maintenance of details of payment, acknowledgement for annual returns.

4. Maintaining the books for newly joined employees and retiring/ leaving employees

5. Communicating the same to the department

6. Complying with the notices, orders, inspections etc., issued by the department of labour, ESIC

7. Filling of annual Return

8. Producing books of accounts, salary details, employees details

9. Resolving Employee specific queries towards payment

10.Submitting application for assessment and complying with the orders

Employees Provident Fund (EPF)

Employees Provident Fund (EPF) The object of the act is to provide for the institution of provident funds, and family pension and deposit linked insurance scheme for employees in factories and other establishments. The provisions have been made for the better future of the industrial worker on his retirement and for the dependents in case of his death while in establishment. It is a piece of welfare legislations.

Coverage

Establishments employing 20 or more persons and engaged in any industries / Classes of Businesses specified. Co-operative Societies, employing 50 or more persons & working without the aid of power.

An establishment continues to be covered under the Act, irrespective of the fall in the employment strength.

Since the Act applies on its own force to the establishments, the employers are required to file the particulars in the specified format for registration and allotment of business number.

Duties of Employer

Enroll all categories of employees including the employees engaged by or through contractors and also piece rated, hourly rated employees.

Remit the contributions and administrative charges before the 15th of the following month.

File the monthly returns

Maintain the contribution card

The employer has to ensure that statutory dues in respect of contractors employees are remitted and returns filed.

Make available all relevant records for inspection of visiting officials with due authorisation.

EMPLOYEES STATE INSURANCE (ESI)

The promulgation of Employees’ State Insurance Act, 1948 envisaged 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, 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.

ESI Scheme being contributory in nature, all the employees in the factories or establishments to which the Act applies shall be insured in a manner provided by the Act. The contribution payable to the Corporation in respect of an employee shall comprise of employer’s contribution and employee’s contribution at a specified rate. The rates are revised from time to time. Currently, the employee’s contribution rate (w.e.f. 1.1.97) is 1.75% of the wages and that of employer’s is 4.75% of the wages paid/payable in respect of the employees in every wage period.

Collection of Contribution

An employer is liable to pay his contribution in respect of every employee and deduct employees contribution from wages bill and shall pay these contributions at the above specified rates to the Corporation within 21 days of the last day of the Calendar month in which the contributions fall due. The Corporation has authorized designated branches of the State Bank of India and some other banks to receive the payments on its behalf.

The section 46 of the Act envisages following six social security benefits :-

(a) Medical Benefit

(b) Sickness Benefit (SB)

(c) Maternity Benefit (MB)

(d) Disablement Benefit

(e) Dependants’ Benefit (DB)

(f) Funeral Expenses

An interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fixed percentage of the workers wages, whereas, they are provided social security benefits according to individual needs without distinction.