Employees Provident Fund & Miscellaneous Provisions Act, 1952, Contribution, Breakup of EPF Contribution, Online procedure for opening of PF account and required documents, ESI Act 1948, Contribution, ESI Benefits, Calculations for payment of compensation,

1. Subject: HR Operation
Unit No.3 Computation Under Social Security
Laws
3.1 Employee Provident Fund Act 1952
Presented By:
Prof. Yogesh. L. Aher
Faculty, HR

2. • Employees Provident Fund & Miscellaneous Provisions Act, 1952:
• Which extend to the whole of India except Jammu & Kashmir.
• Applicability of the Act:
• a) Every factory engaged in any industry specified in Schedule 1 in which 20 or
more persons are employed;
• b) Every other establishment employing 20 or more persons or class of such
establishments which the Central Govt.
• c) Any other establishment so notified by the Central Government even if
employing less than 20 persons.
• Taxability of PF:
• Deduction of PF can be claimed under section 80C while calculating Income
Tax.

3. • Contribution:
• Contribution of Pf paid by employer & employee is 12% (basic pay + dearness
allowance + retaining allowance)
• The establishment which employees less than 20 person shall be restricted to
contribute 10% for both employee & employer contribution.
• It is voluntary for the employees who drawn a salary less than 15000 per month
to became the member of EPF.
• The employee who drawn a salary more than 15000 per month at the time of
joining is not required to make pf contribution.
• The entire 12% of your contribution goes into your EPF account from employee
side along with 3.67% (out of 12%) from your employer.
• While the balance 8.33% from your employer’s side is diverted to your EPS

4. • Breakup of EPF Contribution:
• 12% of the employee’s salary goes towards the EPF.
• Whereas the employer’s contribution is divided as below:
• 1. 30.50% goes towards contribution for EPF (Rs. 550)
• 2. 69.50% goes towards contribution for EPS (Rs. 1250)
• 3. 5% goes towards contribution for EDLI
• 4. 1% goes towards contribution for EPF administration charges
• 5. 01% goes towards contribution for EDLI administration charges
• Therefore, the employer contribution is 13.61%.

5. • Online procedure for opening of PF account and required documents:
• Step 1: Visit the EPFO Website:

6. • Step 2: Register On USSP:
• The “Establishment Registration” button on the homepage of the EPFO website
will open the USSP (Unified Shram Suvidha Portal) sign up page. The employer
needs to click the “Sign Up” button.

7. • On the next page, the employer has to provide the Name, Email, Mobile
Number, and Verification Code and click the ‘Sign Up’ button to create the
account.

8. • Step 3: Fill Registration Form:
• After the creation of the account on the USSP, the employer needs to login to the
USSP and select the “Registration For EPFO-ESIC” select the “Apply for New
Registration” button on the right side of the screen.

9. • Two options will appear, i.e. “Employees’ State Insurance Act, 1948” and
“Employees’ Provident Fund and Miscellaneous Provision Act, 1952”. The
employer will need to select the “Employees’ Provident Fund and Miscellaneous
Provision Act, 1952” and click on the “Submit” button.

10. • Upon clicking the “Submit” button the “Registration Form for EPFO” page will
open and the employer needs to fill in the Establishment Details, contacts,
Contact Persons, Identifiers, Employment Details, Branch/Division and
Activities.

11. • Step 4: Attach DSC:
• After filling all the “Registration Form for EPFO” and attaching the relevant
documents,
• the employer’s Digital Signature Certificate (DSC) is to be uploaded and
attached to the form.
• Once, the DSC of the employer is uploaded, the employer will receive a
successful completion of registration form message and an email from Unified
Shram Suvidha Platform with a confirmation that the EPFO registration has been
completed.

12. • Documents Required For EPF Registration:
• PAN Card of the Proprietor/Partner/Director.
• Proof of address such as the Electricity Bill or Water Bill or Telephone Bill of
the Registered Office (not older than 2 months).
• Aadhar Card of Proprietor/Partner/Director.
• Shop and establishment Certificate/GST Certificate/ any License issued by the
government for the establishment.
• Digital Signature of the Proprietor/Partner/Director.
• Cancelled Cheque or Bank Statement of Entity.
• Hired/Rented/Leased Agreement, if any.

13. • ESI Act 1948:
• Contribution Under ESI Act 1948:
• As per ESI Act 1948 the contribution is as follows…..
• The employee's contribution rate (w.e.f. 01.07.2019) is 0.75% of the wages and
• That of employer's is 3.25% of the wages paid/payable in respect of the
employees in every wage period.
• PT….. Employees in receipt of a daily average wage up to Rs.137/- are
exempted from payment of contribution. However Employers will contribute
their own share in respect of these employees.

14. • Contribution Period and Benefit Period:
• Here are two contribution periods each of six months duration and two
corresponding benefit periods also of six months duration as under……
Contribution Period Cash Benefit Period
1st April to 30th Sept. 1st Jan of the following year to 30th June
1st Oct to 31st March of the year following. 1st July to 31st December.

15. • The following are some ESI benefits that employees can avail under the ESI
Act…………….
• Medical benefit
• Sickness benefit
• Maternity benefit
• Dependents benefits
• Disablement benefits
• Other benefits

16. • 1. Medical benefit:
• Every insurable employee under the Act gets medical benefits the day he
becomes an employee.
• This benefit extends to his family members as well.
• This medical benefit has no ceiling in terms of expenditure on healthcare.
• Hence, the ESI Corporation takes care of all treatment expenses as per its rules.
• Apart from general healthcare benefits, retired and permanently disabled
workers also get an annual premium of Rs. 120.
• This benefit extends to the spouses of the workers as well.

17. • 2. Sickness benefit:
• Insurable employees under the Act can draw some cash compensation in case
they fall sick.
• This compensation is generally 70% of their wages during the period of sickness
for a maximum of 91 days in a year.
• In order to avail this sickness benefit, a worker must pay his contribution for 78
days out of 6 months.
• Hence, he cannot seek this benefit if he contributes for less than 78 days.

18. • 3. Maternity benefit:
• All female insurable employees can avail maternity benefits under the Act in
cases of pregnancy or confinement.
• Confinement, in this case, means labour which results in the birth of a living
child. It can also mean birth after 26 weeks of pregnancy, whether the child is
living or not.
• This maternity benefit is generally payable to employees for Six months. It may,
however, be extendable for one more month depending on medical advice.
• The compensation amount in such cases is the full wage amount of the
employees.
• This is payable only if the employee makes a contribution for 70 days in the
preceding year.

19. • 4. Dependents benefits:
• ESI benefits extend not only to the employees but to their dependents as well in
case of the employee’s death.
• Such death, however, must occur in the course of an employment injury or an
occupational hazard.
• This compensation is generally 90% of the dead employee’s wages in the form
of monthly payments.

20. • 5. Disablement benefits:
• In case an employee suffers some disablement due to an employment injury, he
can seek disablement benefits.
• Such disablement may be either temporary or permanent.
• In the case of temporary disablement, the compensation is generally 90% of the
wage amount until the disablement continues.
• The employee can claim this benefit irrespective of whether or not he paid his
contribution.
• As far as permanent disablement is concerned, the compensation amount
depends on the extent of the injury.
• The Medical Board first determines the extent of the employee’s loss of earning
capacity and then decides it.

21. • 6. Other benefits:
• a) Funeral expenses: The dependents of a deceased employee receive Rs. 10,000
to perform his last rites.
• b) Old age medical care: This is payable for employees retiring on
superannuation or under VRS/ERS.
• Even persons who leave employment after suffering a permanent injury and their
spouses can avail this benefit.
• The compensation amount here is generally Rs. 120 per month.

22. • Calculations for payment of compensation:
• Following things should be noted before calculation.
• Maximum monthly wages considered for calculation is Rs. 8000 under the act.
• Worker from age 16 and above are eligible for calculation.
• Relevant factor is age based multiplier mention in schedule IV
• 1. Compensation in Case of Death:
• In case of death of an employee in the workplace, the compensation that is
offered under workmen compensation policy are:
• 5000 funeral expense is payable.
• 50% of monthly salary X relevant factors based on the age of the worker.
• 1,20,000 is the minimum amount payable.

23. • 2. Compensation in Case of Total Permanent Disability:
• In the case of total permanent disability of an employee due to an accident in the
workplace, the compensation that is offered under workmen compensation
policy are:
• 60% of the monthly salary X relevant factor based on the age of the worker.
• Rs. 1,40,000 is the minimum amount payable in this situation.
• 3. Compensation in Case of Permanent Partial Disability:
• In the case of permanent partial disability of an employee due to an accident in
the workplace, the compensation that is offered under workmen compensation
policy are:
• A percentage of compensation in case of PTD multiply by loss earning capacity
mentioned by Certifying surgeon.

24. • 4. Compensation in Case of Temporary Disability:
• In the case of the temporary disability of an employee due to an accident in the
workplace, the compensation that is offered under workmen compensation
policy are:
• 25% of the monthly salary of the worker is payable every half-month.
• Compensation is offered in case the worker is disabled for more than 3
consecutive days.
• 5 years is the maximum term period of compensation.

25. • Applicability of the act:
• The Employees’ State Insurance Act, 1948 [‘ESI Act’] is applicable to
• non-seasonal power using factories employing 10 or more persons and
• non-power using factories and establishments employing 20 or more persons.
• All employees who earn less than ₹ 21,000/month are covered.
• This scheme has also been made extended to hotels, shops, cinemas and preview
theatres, restaurants, newspaper establishments, and road-motor transport
undertakings.
• This scheme has also been extended to the Private Educational and Medical
institutions that have employed 10 or more people.
• This scheme has been implemented in stages in every state in India except Arunachal
Pradesh and Manipur. The scheme has also been enacted in all union territories except
for Daman and Diu, Dadra and Nagar, and Lakshadweep Islands.

26. Thank You