ESI and PF - Brief Overview

Employee State Insurance or ESI is a scheme launched by the Government of India to offer medical, monetary, and other benefits to workers. Whereas, Employees’ Provident Fund is a social security system that helps employees save a short portion of their salary for future advantages. PF ESI common registration is done by companies through the onboarding of new employees.

An Employment Provident Fund (i.e. EPF) is a retirement perk that is usable by every salaried employee. This reserve is managed and controlled by the EPFO (i.e. the Employees Provident Fund Organisation of India). Any organization engaging20 employees or more are required to register under the EPFO as per our constitutional framework. Contribution to the PF account is necessary for each employee receiving a basic salary up to INR 6500. It is just a savings medium that allows employees to set aside a fraction of their resources each month.

ESI stands for Employee State Insurance administered by the Employee State Insurance Corporation which is an independent body created by the law below the Ministry of Labour and Employment, Government of India. This scheme is begun by Indian workers. The workers are presented with a huge variety of medical, monetary, and other advantages from the employer. Any Company owning more than 10 employees have a maximum salary of Rs. 15000/- has to mandatorily register itself with the ESIC.

Benefits of ESI Registration

ESI Registration ensures that employees enjoy the following benefit under the Employees State Insurance Act, 1948:

1. Sickness benefit
2. Maternity benefit
3. Disablement benefit
4. Funeral Expenses
5. Dependent benefit
6. Physical Rehabilitation
7. Medical benefit
8. Medical treatment by state government
9. Medical and Para-medical Education
10. Old Age Medical Care

APPLICABILITY TO COVER UNDER ESI REGISTRATION

The ESI Act, 1948 applies to following categories of factories and establishments in the implement area:
• Non-seasonal factories using power and employing ten (10) or more persons and wages of such employee are less than 21000/- per month.
• Non-seasonal and non-power using factories and establishments employing twenty (20)

DEFINITION OF ESTABLISHMENT UNDER ESIC REGISTRATION IN INDIA

According to the notification issued by the appropriate Government (Central/State) under Section 1(5) of the Act, the following establishments employing 10 or more persons attract ESI registration cover following establishment.
• Commercial Establishment
• Factory
• Shops
• Eating House
• Hotels
• Restaurants
• Residential Hotel
• Cinemas
• Theater
• Other place of amusement & entertainment
It is the statutory responsibility of the employer under Section 2A of the Act read with Regulation 10-B, to register their Factory/ Establishment under the ESI Act within 15 days from the date of its applicability to them

CONTRIBUTION BY EMPLOYER & EMPLOYEE

The rates are revised from time to time, currently (w.e.f. 01.07.2019)

• The employee’s contribution rate is 0.75% of the wages
• That of employer’s is 3.25% of the wages paid/payable in respect of the employees in every wage period
• Employees in receipt of a daily average wage upto Rs.137/- are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.
• An Employer is liable to pay his contribution in respect of every employee and deduct employee’s contribution from wages bill and shall pay these contributions at the above specified rates to the Corporation within 15 days of the last day of the Calendar month in which the contributions fall due.

Corporate Mitra provides support to get ESI and PF registration all over India.