LAWS RELATING TO SOCIAL SECURITY
Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (EPFMPA)
It was enacted to ensure the financial security of employees in an establishment by providing a system of compulsory savings. A provident fund, required to be established under the EPFMPA, is a contributory fund created to secure the future of employees post retirement. Employees are also allowed to withdraw a part of their PF before retirement. Central Board of Trustees, Employees’ Provident Fund is responsible for administering the EPFMPA. The act is applicable all over India except the state of Jammu and Kashmir. The schemes provided under this act are-
Employee provident fund scheme (EPF) 1952.
Employees’ pension scheme (EPS) 1995
Employees deposit linked insurance (EDLIS) 1976.
Establishments with 20 or more workers should register with Employees provident fund organization which comes under any of the 180 industries specified in the Act. EPF, EPS and EDLIS are calculated on Basic salary, dearness allowances, cash value of food concession and retaining allowances, if any. As per the EPF ceiling limit, the employer is liable to pay contribution only on Rs.6500/- irrespective of the basic salary.
Scheme Name Employee contribution Employer contribution Government Contribution
Employee provident fund 12% 3.67% 0
Employees’ Pension scheme 0 8.33% 1.16%
Employees Deposit linked insurance 0 0.5% 0
EPF Administrative charges 0 1.1% -
EDLIS Administrative charges 0 0.01% -
Employer must remit the contribution deducted to the government before 15th of the following month and are required to submit periodical returns within specified time. Employers are liable to pay interest on late payment of EPF, EPS, EDLI and Administrative charges.
Employees State Insurance Act, 1948 (ESI)
The ESI provides healthcare and cash benefits to employees in the event of sickness, maternity and employment injury. Health and medical care facilities are provided to the workers through a network of hospitals, annexes and dispensaries located throughout the country. The scheme is administered by an apex corporate body called the Employees’ State Insurance Corporation. It offers full medical care to workers and their dependants without any ceiling on individual expenditure. It offers a special package of full medical care to retired/disabled insured persons for self and spouse for a nominal contribution of Rs.120/- per annum. It provides economic protection through cash payments in the event of sickness, temporary/permanent disablement, and maternity, death due to employment injury or occupational disease and unemployment.
It is applicable to the factories employing 10 or more persons irrespective of whether power is used in the process of manufacturing or not. It is applicable to various classes of establishments, industrial, commercial, agricultural or otherwise in nature and includes establishments, such as, Medical and Educational Institutes, shops, hotels, restaurants, cinemas. The existing wage-limit for coverage under the Act, is Rs.15, 000/- per month (with effect from 01.05.2010).
Employees earning upto Rs. 70/- a day are exempted from payment of their share of contribution. The State Governments, as per provisions of the Act, contribute 1/8th of the expenditure of medical benefit within a per capita ceiling of Rs. 1200/- per Insured Person per annum. Any additional expenditure incurred by the State Governments, over and above the ceiling and not falling within the shareable pool, is borne by the State Governments concerned.
ESI Contribution Rates.
· Employees- 1.75% of wages
· Employers- 4.75% of wages
An employer is liable to pay his contribution in respect of every employee and deduct employee contribution from wages 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.
Contribution period and Corresponding Cash Benefit period
Contribution Period Cash Benefit Period
1st April to 30th Sept. 1st January of the following year to 30th June.
1st Oct. to 31st March 1st July to 31st December of the year following
