ESI & PF REGISTRATION

Employees Provident Fund (EPF) is a scheme controlled by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It is regulated under the umbrella of Employees’ Provident Fund Organisation (EPFO). PF registration is applicable for all establishment which employs 20 or more persons, subject to certain conditions and exemptions.

The employee state insurance (ESI) is managed and regulated by the Employee State Insurance Corporation which is an autonomous body under the Ministry of Labour and Employment, Government of India. The ESI scheme was started for the Indian Employees that provided monetary, medical, and other benefits from the employer to the employee.

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Documents Required for PF Registration

PF registration is mandatory for all establishments with 20 or more persons. Some establishments having less than 20 employees would also be required to obtain PF registration. All employee become eligible for a PF right from the commencement of employment and the onus of deduction & payment of PF is with the employer. The 12% rate of PF contribution should be equally divided between the employee and employer. If the establishment houses less than 20 employees, the rate for PF deduction is 10%.

Documents Required or PF Registration

Based on the type of entity seeking PF registration, the list of documents required for PF registration would vary as under:

For Proprietorships

  • Name of the applicant
  • Pan card of proprietor
  • Id proof of the proprietor like Driving license/Passport/Election Card
  • Address proof of proprietor.
  • Address proof for the premises.
  • Complete details of the applicant with their residential address and telephone number

For Partnership Firms / LLP / Company

  • Name of the partnership firm or LLP or Company
  • Certificate of Registration Firms in case of Partnership firm. Incorporation Certificate in case of LLP or Company.
  • Partnership deed in case of partnership firms or LLP.
  • Id proof of Partners –Pan card /Election Card / Passport/Driving license in case of Partnership Firm or LLP. ID proof of Directors in case of company.
  • List of all partners with telephone number and address proof of all partners in case of Partnership Firm or LLP. List of all Directors with contact details in case of Company.

Society/Trust

  • In case of Society, Trust etc, Registration of the organization needs to be done with concerned authority.
  • Certificate of incorporation of society/trust.
  • Moa and Bye Laws of society and trust.
  • Id proof of president and all members of society
  • Complete details of president and all members with their complete address and telephone number.
  • Pan card of society/trust

Common Documents Required for All Entities

  • First sale bill.
  • First purchase bill of raw material and machinery.
  • GST Registration Certificate, if registered under GST.
  • Name of the bankers, address of the bank.
  • Record of a monthly strength of the number of employees.
  • Register of salary and wages, all vouchers, all balance sheets from day one to current date of provisional coverage.
  • Date of joining of employees, fathers name and date of birth.
  • Salary and PF Statement.
  • Cross cancelled cheque.

ESI registration

Currently any factor or employment or any establishment that has employed over 10 employees with a minimum salary of Rs. 21,000 has to mandatorily register itself with the ESIC.

Eligibility

Who is eligible to obtain ESI registration in India?

To be eligible for ESI registration is to have more than 10 workers. In some regions, ESI registration is possible for establishments only if there are more than 20 employees. Here are some other criteria that need to be satisfied for obtaining ESI registration.

  • An employee whose gross salary is up to Rs. 21,000 per month can avail of this with the help of the employer.
  • The establishment is registered with the EPFO.
  • The total contribution to ESI is 6.5% of the gross salary and it can be further divided as:
    • 4.75% by the employer
    • 1.75% of the employee
  • For industrial units where there are chances of occurrence of injury or health issues all the employees with a salary less than Rs.21,000 compulsorily need to get ESI registration.

Documents required for obtaining ESI registration

For obtaining ESI registration in India here is the list of documents that is to be submitted by the employer along with the application:

  • Registration Certificate of the Shops and Establishment Acts.
  • Factories Act
  • Address proof of Principal place of business
  • Copy of PAN Card
  • Bank statement (Latest)
  • Memorandum and Articles of Association or the partnership deed or trust deed depending on the nature of the entity.
  • Certificate of Commencement registration no

The monthly pay sheet is also required for computing the contribution amount for each employee for ESI filings.

Definition of Factory under ESI Act

A Factory is any premise where ten or more than ten persons are employed or were employed for wages on any day of the preceding twelve months, and, in any part of which a manufacturing process is being carried with or without the aid of power. In case within the same premises of a factory, several departments are situated and the departments are engaged in the work in connection with or incidental to a manufacturing process of the factory, they would fall apart from the factory.

This definition of a factory under the ESI includes a seasonal factory that is working for a period of not exceeding seven months in a year and is engaged during that period in any process related to blending, packing, or repacking of tea or coffee or other manufacturing processes that are process notified by the central government.

Mines are not included in this definition under the definition, subject to the operation of Mines Act,2952 or a railway running shed.

Hence, if the number of persons working in the factory premises is ten or more the premise is factory irrespective of the consideration of whether they are paid wages or not. Also, all people working in the factory need not be employed in the manufacturing process.

Definition of Establishment under ESI Act

Under the ESI Act, an establishment is an organized body of men or women or an institution, It is not necessary for an establishment confined to a particular premise or place. If an establishment employs 20 or more persons, it will be required to obtain ESI registration in India. Hence, the establishments employing less than 20 employees who are drawing less than Rs.21,000 a month as a wage should not get ESI registration.

Shops must also be registered under the ESI Act. The supreme court has defined a shop as any premises where economic activities leading to sale or purchase are carried on. Thus, the essential ingredient for determining a shop is that services are rendered to the customer. So service providers like advertisement agencies, liaison offices, consultancy services, real estate services will need to get ESI registration in India.

In this educational institution, hospitals, dispensaries, offices of auditors and solicitors, chartered accountants, and private commercial hospitals are excluded.

Benefits of ESI registration in India

What are the advantages of getting ESI registration in India?

ESI registration allows the employees to enjoy a lot of benefits under the Employees State Insurance corporation scheme.

Medical Aid- From the very first day of employment the registered ESI members and the family members enjoy the benefits of complete medical care and insurance. Retired members and permanently disabled insured persons and their spouses can also avail medical care on payment of an annual premium of Rs.120.

Maternity benefit- Pregnant women can avail of maternity benefits that are payable up to twenty-six weeks. This maternity leave period can be extended on medical advice by 30 days at the rate of full wage subject to contribution for 70 days in the preceding year.

Disablement benefit- From the day of the employees irrespective of having done any contribution, 90% of the wage is payable as long as the temporary disability continues. Permanent disablement benefit is payable at 90% of the wage as a monthly payment.

Sickness benefits- Absent at work due to illness is allowed for a maximum of 91 days per year along with 70% of the monthly wages.

Dependent benefits- In case of the sudden demise of an employee during the employment, the dependents of the deceased employee will receive 90% of his or her monthly salary.

Funeral expenses- The family members of the deceased employees are entitled to an additional amount of Rs.10,000 for the funeral expenses.

Confinement expenses- Confinement expenses can be availed in case of confinement of an insured woman or wife of the employee with no medical facilities under the ESI scheme.

Here are some need-based benefits:

Vocational Rehabilitation: Permanently physically challenged employees who are insured are entitled to vocational rehabilitation training at VRS.

Physical Rehabilitation: Can be availed by the employees in case of physical disablement or injury or hazards due to employment.

Old Age Medical Care: By the annual payment of Rs.120 medical care benefits can be availed for the ESI employees or for those who are opting for VRS/ERS. The members who retiring on account of permanent disability can also avail themselves the same.

Extended Sickness Benefits: Insured employees who are suffering from chronic diseases can avail of the extended sickness benefit up to 2 years, the sick leave of 91 days should be expired.

Enhanced Sickness Benefit: Enhanced sickness benefit was an encouragement measure for ESI employees to undergo vasectomy or tubectomy for the welfare of the family. Extension of this benefit can be availed in case there are post-operative complications.