Menu
Registration under EPFO: An organization is required to register under EPFO if employing 20 or more employees.
Under the EPF Scheme, an employer is required to cover those employes under EPF who are drawing salary less than Rs. 15,000 per month. For other employees (i.e. monthly salary equal or more than Rs. 15,000 per month) can register under EPF optionally.
Employee Contribution under EPF: Once register under the scheme, employer is required to deduct PF @ 12% of Basic + DA payable to the employee as part of his monthly salary.
Employer Contribution under EPF: Employer is required to meet the equal contribution of 12% of the Basic Salary + DA.
Timelines for Deposit of PF: PF deducted by the employer from employees’ monthly salary along with his own share of contribution is required to deposit to the government on monthly basis by 15th of next month.
PF Return Due Date: Electronic Cum Challan (ECR) is the monthly return to be filed. ECR is the common document to be filed for filing and payment of monthly PF on or before 15th of next month. ECR contains the member-wise details of wages and corresponding contribution including basic details of new and existing members.
Consequences of non-compliance of PF Act: Penalty in case of non-payment or false statement or false representation: Imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
Offences by Companies: If the person committing an offence under this Act or the scheme made thereunder is a company, every person, who at the time the offence was committed was incharge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
Applicability: All factories and other establishments employing 10 or more employees with monthly wages not exceeding Rs. 21,000. The following establishments employing 10 or more persons are also mandatorily covered under the ESI scheme:
ESIC Contribution Rate:
Timelines for Deposit of ESI: ESI deducted by the employer from employees’ monthly salary along with his own share of contribution is required to deposit to the government on monthly basis by 15th of next month.
ESI Returns: Half Yearly Return is required to be filed for ESI on or before following due dates:
Consequences of non-payment or delay in deposit of ESI contribution: ESIC Regulation 31 A and 31 C (Interest and damages on late payment): An employer who fails to pay the ESIC contribution within the due date, shall be liable to pay 12 % per annum interest. The ESI Corporation may also levy and recover damages at the following rates. However, the damages may not exceed the amount of contribution payable for default or delay in payment of the contribution.
Section 85(a): Penalty on the failure of contribution payment: Non-payment of contribution may attract imprisonment for a period extending up to 2 years and a fine up to Rs. 5,000.
Section 85(b) to (g): Penalty for non-compliance with other requirements: If an employer deducts the total contribution (employer & employee contribution) from the salary of the employee, reduce the wages of the employee for ESIC Reporting purpose, makes a false return, prevent any ESIC Inspector in discharge his duties etc, he may attract the fine up to Rs. 5,000 and imprisonment up to one year.
Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article.