PF / ESIC / Labour License
Table of Contents
EPF is the main scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
PF / ESI / Labour License
The scheme is managed under the aegis of Employees’ Provident Fund Organisation (EPFO). It covers every establishment in which 20 or more people are employed and certain organisations are covered, subject to certain conditions and exemptions even if they employ less than 20 persons each. Under EPF scheme, an employee has to pay a certain contribution towards the scheme and an equal contribution is paid by the employer. The employee gets a lump sum amount including self and employer’s contribution with interest on both, on retirement.
The following documents need to be attached to the “Registration Form for EPFO” by the employer-
- PAN Card of the Proprietor/Partner/Director.
- Proof of address such as the Electricity Bill or Water Bill or Telephone Bill of the Registered Office (not older than 2 months).
- Aadhaar Card of Proprietor/Partner/Director.
- Shop and Establishment Certificate/GST Certificate/ any License issued by the government for the establishment.
- Digital Signature of the Proprietor/Partner/Director.
- Cancelled Cheque or Bank Statement of Entity.
- Hired/Rented/Leased Agreement, if any.
- License Proof issued by the Identifier/Licensing Authority
Documents Required for ESI Registration
Since the procedure for registration is online, no physical documents are required to be submitted. The documents required while filling the online registration form are:
- Registration Certificate obtained either under the:
- Factories Act, or
- Shops and Establishment Act.
- Certificate of incorporation of the establishment, which are as follows:
- Certificate of Company Registration in case of a company.
- Partnership deed in case of a partnership firm.
- GST certificate of the establishment.
Documents Required for ESI Registration
- Memorandum of Association and Articles of Association of the company.
- Address proof of the establishment. Any one of the following can be submitted as address proof:
- Utility bills (Electricity bill, gas connection bill or telephone bill of the establishment not exceeding three months)
- Rental agreement of the land on which the establishment is situated
- Property tax receipts of the land on which the establishment is situated
- A list of all the employees working in the establishment.
- PAN Card of the business establishment as well as all the employees working in the establishment.
- The compensation details of all the employees.
- A cancelled cheque of the bank account of the company.
- List of directors of the company.
- List of the shareholders of the company.
- A register containing the attendance of the employees
Importance Of EPF
Risk coverage
The Provident Fund’s most fundamental benefit is to cover the risks that employees and their dependents may face as a result of retirement, illness, or death.
Uniform account
One of the most important aspects of the Provident Fund account is that it is consistent and transferable. It is transferable to any other place of employment.
Employee Pension Scheme (EPS)
EPS is available to all PF account holders. According to it, a pension amount is deducted at the rate of 8.33% of up to Rs.15,000 from the employer's contribution, which is paid as a monthly pension to an employee after 58 years of age.
Long-term goals
Many long-term goals, such as marriage or higher education, necessitate the immediate availability of funds. During such times, the accumulated PF amount is frequently useful.
Emergency needs
Certain unanticipated events, such as marriage or other family gatherings, as well as any mishap or illness, necessitate immediate financial assistance. The PF amount can be extremely beneficial.
EPF registration is mandatory for all establishments-
- Which is a factory engaged in any industry having 20 or more persons.
- To any other establishment employing 20 or more persons or class of such establishments which the Central Government may, by notification specify on this behalf.
PF / ESI / Labour License Registration
The employer must obtain the EPF registration within one month of attaining the strength, failing which penalties will be applicable. A registered establishment continues to be under the purview of the Act even if the employee strength falls below the required minimum.
Central Government may apply the provisions to any establishment employing less than 20 employees after giving not less than two months’ notice for compulsory registration. Where the employer and majority of employees have agreed that the provisions of this act should be made applicable to the establishment, they may themselves apply to the Central Provident Fund (PF) Commissioner.
PF / ESIC / Labour License
The Central PF Commissioner may apply the provisions of this Act to that establishment after passing the notification in the Official Gazette from the date of such agreement or from any subsequent date specified in the agreement.
All the employees will be eligible for a PF from the commencement of their employment, and the responsibility of deduction and payment of PF lies with the employer. The EPF contribution of 12% is paid equally by the employer and employee.
The employee’s PF contribution is 12%, which is deducted from the employee’s basic salary. The employer also contributes an amount equal to 12% of the basic salary of an employee. If the establishment has employed less than 20 employees, the PF deduction rate will be 10%.
Any non-seasonal factory or establishment having more than 10 employees (in some states it is 20 employees) who have a maximum basic wages/salary of Rs. 21,000 per month (Rs.25,000 per month in the case of persons with disability) are covered under the ESI scheme and thus, they have to mandatorily register with the ESIC within 15 days from the date of its applicability.
Under this scheme, the employer needs to contribute an amount of 3.25% of the total monthly wage payable to the employee whereas the employee needs to contribute only 0.75% of his monthly wage every month of the year. The only exemption to the employee in paying his contribution is whose daily wage is less than Rs.176/- per day.
The establishment needs to comply with the following after registering under the ESIC:
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- Maintaining the attendance register.
- Maintaining a complete register of wages for workers.
- Inspection book.
- Monthly return and challan within 15th of the succeeding month.
- Maintaining a register that records any accidents that happened on the premises.
Provident Fund (PF) Due Dates
The PF will be deducted from every employees’ salary, and the payment due date is within the 15th of the following month. E.g. , if you want to deposit the PF contribution for June, then as an employer you should clear all the payments before the 15th of July.
Payment and filing for the PF return date are probably the same, and you can process it at the same time.
Therefore, the due date of the PF return is the same as the payment date, and that is before the 15th of the following month. The PF annual return due date is 25th April of the following year.
Employee state insurance (ESI) due dates
Every employer makes the ESI payment on a monthly basis, and the payment is given to the ESI department. The due date for ESI is the 15th of the following month, which can also exceed or change according to the department rules. In this context, ESI is similar to the PF.
Employee state insurance (ESI) due dates
Every employer makes the ESI payment on a monthly basis, and the payment is given to the ESI department. The due date for ESI is the 15th of the following month, which can also exceed or change according to the department rules. In this context, ESI is similar to the PF.