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ESI & PF RULES FOR COMPANIES
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Employee state Insurance act-1948Employee state Insurance act-1948
Employee state Insurance act-1948 Employee state Insurance act-1948 Objective :- The Object of the Act is to secure sickness, Maternity, Disablement
and Dependant’s benefits to the dependents of such employee
Eligible :- Any person employed for wages (up to Rs. 10,000) in or in connection with the work of a factory or establishment end.
Contribution :- Every Employee has to pay 1.75% and employer has to pay 4.75% of the wages towards ESI contribution
Contribution Period & Benefit Period :-
Benefits under the Scheme :-Benefits under the Scheme :- 1) Medical Benefit 2) Cash Benefit - : [ a) Sickness Benefit, b) Maternity Benefit, c) Disablement Benefits,d) Dependent
Benefit, e) Funeral Expenses ]
1st July to 31st Dec. of the Calendar year
1st October to 31st March
1st Jan to 30th June of the year following
1st April to 30th SeptBenefit PeriodContribution Period
Employee state Insurance act-1948 Employee state Insurance act-1948 Objective :- The Object of the Act is to secure sickness, Maternity, Disablement
and Dependant’s benefits to the dependents of such employee
Eligible :- Any person employed for wages (up to Rs. 10,000) in or in connection with the work of a factory or establishment end.
Contribution :- Every Employee has to pay 1.75% and employer has to pay 4.75% of the wages towards ESI contribution
Contribution Period & Benefit Period :-
Benefits under the Scheme :-Benefits under the Scheme :- 1) Medical Benefit 2) Cash Benefit - : [ a) Sickness Benefit, b) Maternity Benefit, c) Disablement Benefits,d) Dependent
Benefit, e) Funeral Expenses ]
1st July to 31st Dec. of the Calendar year
1st October to 31st March
1st Jan to 30th June of the year following
1st April to 30th SeptBenefit PeriodContribution Period
Rate of Contribution :ESI
The rates of contribution from 01.01.1997 are:- Employees’ Contribution --- 1.75 % of the wages Employer’s Contribution --- 4.75 % of the wages Total --- 6.50 % of the wages
Employees in receipt of average daily wage of Rs.50/- or less. are exempted from payment of their share of contribution but are entitled for all benefits under the Scheme. However, employer has to pay employer’s contribution on the wages paid to such employees.
Under the provisions of Employees provident Fund Act,1952 employer has to pay additional 1.10% towards administration and EDLI Charges. That means Employer has to pay total 13.10% towards contribution under PF.
1.61%
1.61%
NIL
Admin. Chges. under PF
32.11%6.50%24%Total:
18.36%4.75%12%Employer’s Share
13.75%1.75%12%Employees’ Share
TotalESIPF
Advantages to Employers: Employers who are covered under the ESI Act,
have the following benefits;1. Absolved from the liability of providing medical
allowance, reimbursement of actual medical expenses or taking medical insurance policy.
2. Exempted from applicability of the :a) Maternity Benefit Act;a) Workmen's Compensation Act.1. No need to provide sick leave separately to the
employees.2. Employer’s Contribution towards ESI Scheme is
qualified as expenses under Income tax Act.
Benefits to the Employees:ESI Act.
Employees are entitled for benefits in cash and kind which includes:
1. Medical Benefit – for Self and family2. Sickness Benefit - for self3. Maternity Benefit - for self 4. Disablement Benefita) Temporary Disablement Benefit - for self b) Permanent Disablement Benefit - for self 1. Dependents’ Benefit – for dependents in case of death due to
employment injury.In addition, the scheme also provides some other benefits to insured
persons such as :i. Funeral Expenses – to the eldest surviving member of the family ii. Old age Medicare – for self and spouseiii. Vocational Rehabilitation
Procedure to claim medical benefit An employee is given declaration Form at the time
of joining. Employee has to fill in and sign the Form and then return the same to the concern person along with two post card size photographs of the member and his family.If the insured person is not staying with his family then he has to give his own photograph.
This Form is submitted to ESI Branch office along with Return of Declaration Form .
Branch office issue Temporary Identity cards to the insured person first and then after app. 4 months permanent card is issued to the insured person.
Procedure to claim medical benefits
After getting the temporary card insured person has to approach Insurance medical practitioner and registered the temporary identity card.
After registration of the temporary card member can approach the Insurance Medical Practitioner(ESI Doctor) whenever he or any of his family member is sick and can avail free medical benefit.
In case if the insured person has not received the card temporary or permanent) still he can avail the benefit by obtaining Form No.86 and letter from the employer confirming that ESI contributions in respect of the insured person are paid regularly.
Benefits to the Employees:
Medical Benefit1. Insured person and his dependent family members are
entitled to free, full and comprehensive medical care.2. Medical benefit is Extended to the insured person and his
dependent family members from the date he / she enters the insurable employment.
3. The Medical care consists of i. Out patient treatment, In patient treatment ;ii. Diagnostic services, Free supply of drugs and dressings ;iii. Super – speciality treatment ; andiv. Hospital services.
Extension of Medical Benefit:
ESI Scheme also provides for comprehensive medical cover to the retired and disabled insured person and their spouses.
Contribution payment of Rs.120/- Per annum, per couple are required to be paid.
Insured persons shall be in continuous employment for at least 5 years before retirement.
Medical benefits are administered through Insurance Medical Practitioners, dispensaries, clinics and Hospitals in implemented areas.
Sickness Benefit During the period of sickness an employee is entitled for the periodical payments is called sickness
benefit. To avail the sickness benefit employee has to fulfill following conditions:1. Employee has to be in insurable employment for a period of more than nine months and;2. ESI contribution should have been payable for at least 78 days in relevant contribution period. Maximum period for which this benefit can be avails is for 91 days in two consecutive benefit period
I.e. January to December. There is a waiting period of 2 days. I.e. for the first two days of sickness no payments are made
except in a case if an employee is certified sick within a spell of 15 days of the last sickness benefit paid.
The rates of payment varies from Rs.14- p.d. to Rs.125- p.d. averaging just above 50 percent of the daily wages of an Insured person.
1. How to avail Sickness Benefit: Insured person who is sick has to approach ESI Doctor to avail medical benefit. Doctor will issue him
medical certificate in appropriate Form. The period of certificate will not be for more than seven days. This certificate duly signed on the back side shall be submitted to ESI Branch office preferably within
three days along with fitness certificate issued by the doctor.Then Branch office will give payment to the insured person.
Insured person shall submit duplicate copy of the certificate to the employer for intimation for remaining absent on health ground.
It may be noted that whenever an insured person is on ESI Leave he can either receive payment from ESI Corporation or from his employer. Getting double payment is an offence.
Extended Sickness Benefit
If insured person is suffering from T.B., leprosy mental diseases or the 34 specified long term diseases is entitled to Extended Sickness benefit.
Insured person is entitled for further period of 124/309 days benefit.(In addition to 91 days Sickness benefit)
The rate of benefit is 40% more than the rate provided under the standard sickness benefit.
To avail this benefit an insured person should have been in continuous employment for two years and should have contributed for at least 156 days in 4 preceding contribution period.
Maternity Benefit Insured women are entitled for cash payment in case of
confinement or miscarriage or sickness arising out of pregnancy is called ‘maternity benefit’.
This benefit is normally payable for 12 weeks. However, in case sickness arising out of pregnancy duly certified by the authorised Medical Officer additional one month benefit is given.
The rate of benefit is double the standard sickness Benefit rate, I.e. almost full wages.
To avail this benefit an insured women should have completed nine months employment and contribution should have been payable for not less than 70 days in in the immediately preceding two consecutive contribution period corresponding to the benefit period in which confinement occurs.
Disablement benefit
1. Temporary disablement benefit: In case of disability arising to insured person by an
accident arising out of and in the course of employment this benefit is available..
The insured person is paid the benefit for the entire period as certified by the Insurance medical Practitioner for which in insured person does not work.
The rate of benefit is not less than 70% of the daily average wages of insured person.
The only condition to avail this benefit is that the insured person should be attending his duties during the normal working hours or extra hours if permitted.
2. Permanent disablement benefit
In case if an employment injury or occupational disease results in permanent , partial or total loss of earning capacity of an insured person he is entitled for this benefit.
If entitled periodical payments are made to insured person for life.
The rate of benefit depends on the quantum of actual loss of earning capacity as determined by the medical board.
The rate of this benefit is enhanced periodically in view of the rise in cost of living.
Commutation of this benefit is also permissible subject to that the rate of daily benefit does not exceed Rs.1.50 p.d.and also if the commuted value (One time lump sum payment ) does not exceed Rs.30,000/-.
Dependents’ benefit If an insured person dies as a result of employment
injury or occupational disease monthly pension is paid to his dependents is called dependent benefit.
Dependants are: widow, legitimate or adopted children's up to the age of 18 if not then parents or grandparents.
The rate of monthly pension is roughly equivalent to about 70% of the wage rate of the insured person. The amount is distributed as 60% to widow and balance 40% to the children’s.
How to avail disablement & dependent benefit:
Whenever an accident occur during the course of an employment employer has to send report of an accident to the concern branch officer in prescribed Form ,along with witness statement, within 24 hours of an accident.
If possible and if the ESI Hospital/ dispensary is nearby then insured person who met with an accident has to be shifted there or otherwise to Pvt. Hospital or dispensary.
An entry shall be made in Accident register.
Branch officer/ Investigator from ESI department visits the office of the establishment for enquiry and the papers are submitted to the Regional office for approval.
After approval from head office the benefit (payment) is made to the insured person.
To avail dependants benefit similar procedure is followed except some more documents such as death certificate , age proof of children's is sought by the ESI office.
Employee State Insurance Act-1948Employee State Insurance Act-1948
Form to be used under ESI Scheme
1. Form No. 1 :- ESI Declaration form for New Entrants2. Form No. 1B :- Changes in Family declaration 3. Form No. 72 :- Application for Duplicate Card 4. Form MRO 266 :- Application form for change of Name / Year
of Birth of insured person Woman5. Form No.6 :- ESI half yearly return 6. ESI Challans :- With in 21 days from the case of every Month .7. Form 37 :- For registering with Local ESI doctor
Provident fund & Misc. Provident fund & Misc. Provision ActProvision Act
Employees’ Provident Fund Act, 1952
Introduction: Employees’ Provident Fund Act is one of the Social Security Scheme
introduced by the Central Govt. The basic object of the Act is to provide monthly compulsory savings for the
employees’ consisting of matching contribution from both employee as well as employer.
Employees Provident Fund organisation pay interest every year on the accumulations received in respect of the member.Last year I.e. 2005-06 EPFO credited interest @ 8.50% on monthly running balance to the employees account.
PF department issues PF slips every year to all the employees through the employer which consist of summary of opening balance of employees’ & employer’s share employees’ share, employer’s share, interest earned on employees & employer’s share.
PF Slip issued by the PF department does not include the employer’s contribution towards Employees pension Scheme I.e.8.33% cont.
Benefits under the PF Act,1952
Employees Provident Fund Act,1952 provides for following benefits
Non refundable advances during the employment & Withdrawal benefit after leaving the service.Forms to be filled in: Form No2 (Nomination Form) & Form No. 11 at the
time of joining Form No. 19 & 10-C for withdrawal or Form No. 13
for transfer of PF accumulations at the time of leaving.
Rate of Contribution: PF
8.33%
8.33%
NIL
E.P.S.
25.61%1.61%15.67%Total
13.61%1.61%3.67%Employers Contribution
12%NIL12%Employees' Contribution
TotalAdm. Charges
P.F.
Provident fund & Misc. Provision ActProvident fund & Misc. Provision Act
PF Process:-
Day One :- Filling up PF Form No. :- 2 ( PF & EPS Declaration form ) and send it to Zonal office for submission to PF consultant.
PF number will be provided by Zonal office through PF MIS.
Withdrawal & Transfer Process :-
If an employee resigned , then he has to fill Form :- 13 for Transferring the PF fund from previous company to Present company.
If an employee resigned , then he has to fill Form :- 19 for withdrawal of Provident fund and Form :- 10 C for withdrawal of Pension scheme.
Death of an Employee :- In case death of Employee, Form:- 5(IF) for insurance refund, Form:- 20 for
Provident fund withdrawal, Form 10 D for Pension Withdrawal
Table of various non refundable advances which an employee can avail under the Employees PF Scheme.
Amt. Receivable.ConditionType of Benefit
Same as above10 yrs membership of the fund & member should have taken loan from Govt.Body.
2. Advance from the fund for repayment of loan
3 months wages(Basic +DA) Stay in Hospital at least for a month
3.Advance from the fund for illness viz hospitalization for more than a month, major surgical operation or suffering from T.B.Cancer etc.
50% of member own share of contribution
7 years membership of the fund & min.bal.in members a/c should be Rs.1000/-
4. Advance from the fund for marriage of self/son/ daughter/sister/ brother etc
Same as aboveSame as above5.Advance from the fund for education of daughter / son
Rs.500/- or 50% of member own share of contribution. (To apply within 4 months.)
a) Certificate of damage from appropriate authority.b) State Govt.Declaration
6. Grant of advance in abnormal condition.(natural calamities etc.)
Same as above10 yrs membership of the fund & member should have taken loan from Govt.Body.
2. Advance from the fund for repayment of loan
36 months wages (Basic & D.A.) OR Member’s own share & co.s share of cont.
5yrs. Of membership of the fund.(min.balance in member’s a/c should be Rs.1000/-)
1.Withdrawal from the fund for a) The purchase of
dwelling(residential) b) Construction of house c) Purchase of dwelling flat
Withdrawal Benefit :-
Employees who leave the service have two options.1. To transfer their PF accumulation to the present establishment by filling Form No. 13.2. To apply for withdrawal of contribution by filling up Form No.19 & 10C3. If the employee leaves the service before six months then the employee is not entitled for withdrawal of EPS Scheme.
Employees Pension Scheme 1995 :-
Various benefits available under Employees Pension Scheme 1995 –1. Monthly Member’s Pension Scheme.2. Widow & Children Pension.3. Orphan Pension.4. Reduced Pension.5. Disablement Pension.
Eligibility :- An employee who has worked for more than 10 years or more and has attained age of 58 years is entitled for pension.
Provident fund & Misc. Provision ActProvident fund & Misc. Provision Act
Form to be used under Provident Fund Scheme
1. Form 2 :- PF & EPS Declaration for every new Entrants2. Form 19 & 10C:- Withdrawal form for left employe3. Form 13 :- For Transfer of PF / EPS4. From 31 :- For application of advance from Fund5. Form 10 D :- Application for pension ( Death Case )6. Form 5 (IF) :- Insurance refund ( Death Case )7. Form 20 :- Provident fund withdrawn ( Death case 8. Form 12 A :- Monthly return which is submitted along with
triplicate copy9. From 3A & 6A :- Annual Return
Reduced Pension :- An employee who has worked for more than 10 years can also avail reduced pension, after attaining age of 50 years, if he is not employed anywhere or in an establishment where PF Act is not applicable. In case of reduced pension for every year short of 58 year 3% pension will be deducted from monthly pension amount.
The pension amount will be worked out on the following formula.
Member’s Monthly =Pensionable Salary * Pensionable Service Pension -------------------------------------------------- 70If a member leaves the service before completion of 10 years of membership then he has following option.A. To opt for Scheme CertificateB. To withdraw the amount.Member has to fill Form 10-C to avail the benefit & Form 10-D to claim pension.
4)It is also observed that the Sub contractors are not returning the Salary Sheet to the Consultant. It is therefore Suggested that the Sub Contractor shall return the Signed salary sheet to Consultant without fail in the same month as per schedule.
5) Data in attendance sheet should be as per prescribed period i. e. 21st to 20th.
6)Sometimes Salary Rate of all the employees are not given at a time.The same shall be given together only and not in piecemeal.
7)Every month a list shall be obtained from Sub-contractor providing details of new joiners with their Rate of Salary, Date of Joining & list of employees who left the Services. As this list is required to prepare & submit monthly return in Form 5-10 to Pf department and also for updating of our records.
Suggestions to Improve the Compliance
1)To fill in ESI / PF Form at the time of joining only. This will enable the Company to submit the Forms to concern ESI Office for obtaining TIC which will enable the employees of the sub- contractors to avail various benefits under ESI Act 1948. It may please be noted that non submission of ESI Declaration Form within 10 days from the date of joining is an offence punishable under Section 85(g) of the ESI Act, 1948. Similarly Non-submission of PF Nomination Form may also deprive the member of availing pension facility.
2)Please ensure that Sub-Contractors provide attendance data of their employees on or before 25th of every month. This will be of a great help to workout PF ESI Contribution as per Time Schedule fixed and remit the same to respective Govt. authorities within stipulated time. At the same time it will help the contractors to disburse the salary to their employees within stipulated time i.e. on or before seventh of every month.
3) It is observed that we are getting salary rates from the employees which are inclusive of reimbursements such as conveyance – Railway Pass, Mobile Phone expenses. etc. So the Subcontractor shall give the rates excluding these reimbursement.