ESI
ESIC (Employees’ State Insurance Scheme of India), is a social security system dedicated to provide full medical care for self and dependents, from day one of insurable employment, the insured persons are also entitled to a variety of cash benefits for sickness, temporary or permanent disablement etc. resulting in loss of earning capacity, In case of insured women, dependents of insured persons who die in industrial accidents or because of employment injury or occupational hazard are entitled to a monthly pension called the dependents benefit.
Mandatory Registration
It is mandatory for a factory or business establishment like hotels, restaurants, shops, clinics, educational institutions etc. employing 10 or more persons to get registration under the scheme.
Wage limit
The contributions will be made for Persons having wages/ salariesof Rs. 21000 per month (w.e.f 1st Jan 2017) or less.
The persons having wages / salaries more than Rs. 21,000 can voluntarily choose to contribute under the scheme as they are exempt from the provisions of this scheme.
Contributions
The employer’s contribution is 4.75% of wages and employee’s contribution is 1.75%.
PF
EPF (Employee’s Provident Fund) is a social security fund created for the primary purpose of helping an employee to save a fraction of his salary every month so that it can be usedwhen the employee is temporarily or no longer fit to work or at the time of retirement.
Mandatory Registration
It is mandatory for an establishment employing 20 or more persons to get registration under the scheme.
Wage limit
The contributions will be made for Persons having salary (basic salary + Dearness Allowance + Cash value of food concession + Retaining allowance) of Rs. 15000 per month
The persons having salary of more than Rs. 15,000 can voluntarily choose to contribute under the scheme as they are exempt from the provisions of this scheme.
Contributions
Both the employer and employee has to contribute 12% of salary (basic salary + Dearness Allowance + Cash value of food concession + Retaining allowance)
Of the 12% contribution by the employees, 3.67% is for EPF, 8.33% is for EPS (Employee’s Pension scheme).
In addition to the above 12%, employees have to contribute 0.5% for EDLI (Employees Deposit linked Insurance) and 0.86% is contributed for the administrative charges.
So, effectively the contribution of an employee is 13.36%.
Labour Laws
The applicability of certain Acts is provided below:
The Payment of Wages Act
The main aim of the Act is to ensure that the payment of wages to employees is made at regular intervals and without any unauthorized deductions.
Maximum salary to which the Act applies to is Rs. 16000 per month.
The Act provides for maintenance of certain registers / records to ensure that the employees are paid the right amount as salary.
The Minimum wages Act
The main aim of the Act is to hear claims filed by the aggrieved employees who are not paid the required wages for a particular work.
The Act is mainly applicable to Construction Building operation, Watch and ward (security services), Sweeping and cleaning, Loading and unloading operations in Railways Goods shed, Mines.
The Act provides for maintenance of certain registers / records which are mostly the same as under The Payment of Wages Act.
The Equal Remuneration Act
The Act provides for the payment of equal remuneration to men and women workers and for prevention of discrimination, on the ground of sex, against women in the matter of employment
Any aggrieved female employee can file a claim against the employer under this Act.
The Factories Act
The main aim of the Act is to regulate the working conditions in factories and to ensure the basic minimum requirements for safety, health, and welfare of the workers as well as to regulate the working hours, leaves, holidays , employments of women, children etc.
Any premises having 10 or more workers on any day of the preceding 12months is required to be registered under the Factories Act.
Shop and Establishment Act
The main aim of the Act is to regulate payment of wages, hours of work, leave, holidays, and terms of service for the persons employed in shops and commercial establishment.
Every shop and commercial establishment is required to get registered under this Act.