Employee State Insurance Corporation or ESIC is a self-financing social security and health insurance program that provides medical coverage, sickness benefits, maternity benefits, disability benefits, and many other benefits. To the employees and their families or establishments of 10 or more employees receiving wages up to Rs. 21,000/- (15000/- Before 1st January 2017) are required to be registered for ESIC under the ESI Act 1948.
The scheme’s incentives are funded by contributions collected by the employees at a fixed percentage of wages. Currently, covered employees contribute 1.75% of the compensation to the ESIC and covered companies commit 4.75% of the salary, payable to their staff.
All establishments and factories with more than 10 employees are required to apply within 15 days of the ESI Act for ESI registration, 1948, applicable to them.
- Provides complete medical care to employees
- Includes employee’s dependants also
- Mandatory for units with >10 employees
Benefits of ESIC registration
- Sickness benefits at the rate of 70% (in the form of salary), in case of any certified illness certified and which lasts for a maximum of 91 days in any year
- Medical Benefits to an employee and his family members
- Maternity Benefit to the women who are pregnant (paid leaves)
- 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
- Same as above in case of disability of the employee
- Funeral expenses
- Old age care medical expenses
PF is one of India’s key savings platforms for the working class. If the total employee strength is 20 or more, an establishment or business is required to obtain EIN No. Employee Total strength Includes contractors or temporary employees in the company, such as housekeeping staff, security, or other temporary workers.
EPF is divided into two sections: the provident fund, and the employee pension scheme, respectively. Provident Fund receives the subscriber contribution – 12% of the basic plus daily allowance. 8.33% goes to the Employee Pension Scheme out of 12 % in the case of employer contribution, the rest goes to the provident fund account.
Considering the number of years of service and the average salary the person receives the pension. A retired person, along with PF, will have lump sum EPS money. People who reach 58 years of age and perform 10 years of service without withdrawal earn pension benefits.
Members can withdraw from these accumulations in order to meet life’s financial requirements – no need to refund unless misused. The Member can settle the account after resignation. The member receives his PF, Employer Contribution, and Interest.
- Mandatory for units with >20 employees
- Provides Insurance Benefits
- Pension Benefits
- Withdrawal Benefits
- Death Benefits
Documents Required for ESI and PF Registration
- Registration Certificate or Licence issued under the Shops and Establishment Acts or Factories Act.
- Address Proof: Latest Rent receipt of the premises you are occupying indicating the capacity in which the premises are occupied, if applicable.
- Latest building Tax/Property Tax receipt (Photocopy).
- Memorandum and Articles of Association/Partnership Deed/Trust Deed as applicable.
- Photocopy of certificate of Commencement of production and/or GST Registration Certificate.
- PAN Card of Entity & Directors/Partners.
- Aadhar Card/ Voter identity card of Directors.
- Evidence in support of the date of commencement of production/business/first sale (e.g. Copy of First Invoice).
- Month wise employment position, salary, etc.
- Copy of bank statement of last 12 months.
- Canceled cheque (Bearing pre-printed company/firm name & Current Account No).
Process and Procedures – ESI- and PF
- After verification of the form, the government will issue a 17 digit unique number
- The employee who is registered under this scheme will provide the employer with the filled form and photographs of his own family members as a part of the process of registration and will get an ESI card after registration
- Any change in the Company or its employees will be intimated to the ESIC
Mandatory Returns Filed Every Year
- Register of Attendance of the Employees
- Form 6 – Register
- Register of wages
- Register of any accidents which have happened on the premises of the business
- Monthly returns and challans
Frequently Asked Questions
1. How can I register for PF and ESI?
- Name of the company.
- Date of the setup of the organization.
- Scanned copy of the company’s PAN (Proprietor’s, in case of proprietorship concern).
- Scanned copy of the licenses available in the name of the company.
A pdf format of the form is available on the website. Fill in the form, with the details asked for, and submit it to ESIC, for registration. Once verified, a registration number, a 17-digit unique identity, will be provided to the organization. The ESI filings can be done, once you receive the 17-digit number.
3. Are ESI and PF mandatory?
Yes, PF and ESI coming under the Social Security Act and these are mandatory for all Organisations, where 10 for ESI and 20 for PF employees are working. And it should be mentioned in Salary Slip.
4. Who is eligible for PF and ESI?
All employees of a covered unit, whose monthly incomes (excluding overtime, bonus, leave encashment) does not exceed Rs. 21,000 per month, are eligible to avail benefits under the Scheme. Employees earning daily average wages up to Rs. 176 are exempted from ESIC contribution.
5. Can PF be optional?
In an employee-friendly move, the government today made provident fund contribution optional for workers getting salary below a threshold. … At present, all employees are required to pay 12% of basic wages including basic salary and DA as a contribution to the PF.
6. What is the ceiling limit for PF?
The government is set to raise the monthly wage ceiling for mandatory Employees’ Provident Fund (EPF) cover to Rs 21,000 from Rs 15,000 at present, a move that could inflate the government’s annual Employees Pension Scheme (EPS) outflow by 50% to Rs 3,000 crore.
7. What is the basic salary limit for PF?
While contributing towards EPF is mandatory for those earning basic wages of up to Rs 15,000. Those earning basic wages more than 15000 per month, EPF contribution is not mandatory.
8. Will PF registration help in the collection of pensions?
Yes. PF has a direct impact on the pension of an employee. Of the amount contributed by the employer towards EPF, 8.33% of it goes to the EPS, i.e., Employee Pension Scheme.
9. What is the rate of PF contribution?
Both the employee and employer contribute 12% of the salary. The employers part consists of 12% of basic wages + dearness allowance + retaining allowance. If the number of employees is less than 20 in the firm, then the PF rate is 10%.
10. What percentage of CTC is PF?
“2Acts.in” provides all the necessary info about existing Government Registrations along with newly launched registrations like MSME, Udhyog Aadhar, Start-up India Registration, ESI, PF, Shop and Establishment Etc. All these services take the average time of about 10 – 15 working days, subject to government processing time and client document submission.