Employee state Insurance act1948

Employee state Insurance act-1948

Objective :- The Object of the Act is to secure sickness, Maternity, Disablement and
Dependants 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 :-

Contribution Period

Benefit Period

1st April to 30th Sept

1st Jan to 30th June of the year

following

1st October to 31st March

1st July to 31st Dec. of the

Calendar year

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 ]

Employee state Insurance act-1948

Objective :- The Object of the Act is to secure sickness, Maternity, Disablement and
Dependants 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 Period
& Benefit Period :Contribution

Benefit Period

1st April to 30th Sept

1st Jan to 30th June of the year

following

1st October to 31st March

1st July to 31st Dec. of the

Calendar year

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 ]

Rate of Contribution :ESI

The rates of contribution from 01.01.1997 are:-

Employees Contribution --- 1.75 % of the wages

Employers 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 employers
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.
PF

ESI

Admin.
Chges.
under PF

Total

Employees Share 12%

1.75%

NIL

13.75%

Employers Share

12%

4.75%

1.61%

18.36%

Total:

24%

6.50%

1.61%

32.11%

Advantages

1.
2.
a)
a)
1.
2.

to Employers:

Employers who are covered under the ESI Act,

have the following benefits;
Absolved from the liability of providing medical
allowance, reimbursement of actual medical
expenses or taking medical insurance policy.
Exempted from applicability of the :
Maternity Benefit Act;
Workmen's Compensation Act.
No need to provide sick leave separately to the
employees.
Employers 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 family
2.
Sickness Benefit - for self
3.
Maternity Benefit - for self
4.
Disablement Benefit
a)
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 spouse
iii.
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 Benefit

1.

Insured person and his dependent family members are

entitled to free, full and comprehensive medical care.
Medical benefit is Extended to the insured person and his
dependent family members from the date he / she enters
the insurable employment.
The Medical care consists of
Out patient treatment, In patient treatment ;
Diagnostic services, Free supply of drugs and dressings ;
Super speciality treatment ; and
Hospital services.

2.

3.
i.
ii.
iii.
iv.

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

1.
2.

1.

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:
Employee has to be in insurable employment for a period of more than nine months and;
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.
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
1.

benefit

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 childrens.

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-1948

Form to be used under ESI Scheme

1.
2.
3.
4.

Form No. 1 :- ESI Declaration form for New Entrants

Form No. 1B :- Changes in Family declaration
Form No. 72 :- Application for Duplicate Card
Form MRO 266 :- Application form for change of Name / Year
of Birth of insured person Woman
Form No.6 :- ESI half yearly return
ESI Challans :- With in 21 days from the case of every Month .
Form 37 :- For registering with Local ESI doctor

5.
6.
7.

Provident fund & Misc.

Provision 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 &
employers share employees share, employers share, interest earned on
employees & employers share.
PF Slip issued by the PF department does not include the employers
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
P.F.

E.P.S.

Adm.
Charges

Total

Employees'
Contribution

12%

NIL

NIL

12%

Employers
Contribution

3.67%

8.33%

1.61%

13.61%

15.67%

8.33%

1.61%

25.61%

Total

Provident 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.
Type of Benefit

Condition

Amt. Receivable.

1.Withdrawal from the fund for

a) The purchase of
dwelling(residential)
b) Construction of house
c) Purchase of dwelling flat
2. Advance from the fund for
repayment of loan

5yrs. Of membership of the

fund.(min.balance in
members a/c should be
Rs.1000/-)

36 months wages (Basic &

D.A.) OR Members own
share & co.s share of cont.

10 yrs membership of the

fund & member should have
taken loan from Govt.Body.

Same as above

2. Advance from the fund for

repayment of loan

10 yrs membership of the

fund & member should have
taken loan from Govt.Body.

Same as above

3.Advance from the fund for illness viz

hospitalization for more than a month,
major surgical operation or suffering
from T.B.Cancer etc.

Stay in Hospital at least for a

month

3 months wages(Basic +DA)

4. Advance from the fund for marriage

of self/son/ daughter/sister/ brother etc

7 years membership of the

fund & min.bal.in members
a/c should be Rs.1000/-

50% of member own share of

contribution

5.Advance from the fund for education

of daughter / son

Same as above

Same as above

6. Grant of advance in abnormal

condition.(natural calamities etc.)

a) Certificate of damage from

appropriate authority.
b) State Govt.Declaration

Rs.500/- or 50% of member

own share of contribution.
(To apply within 4 months.)

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 & 10C
3. 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 Members 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 Act

Form to be used under Provident Fund Scheme

1.
2.
3.
4.
5.
6.
7.
8.

Form 2 :- PF & EPS Declaration for every new Entrants

Form 19 & 10C:- Withdrawal form for left employe
Form 13 :- For Transfer of PF / EPS
From 31 :- For application of advance from Fund
Form 10 D :- Application for pension ( Death Case )
Form 5 (IF) :- Insurance refund ( Death Case )
Form 20 :- Provident fund withdrawn ( Death case
Form 12 A :- Monthly return which is submitted along with
triplicate copy
From 3A & 6A :- Annual Return

9.

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.
Members Monthly =Pensionable Salary * Pensionable Service
Pension
-------------------------------------------------70
If a member leaves the service before completion of 10 years of
membership then he has following option.
A. To opt for Scheme Certificate
B. 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.