How Much Fine Has To Be Paid By An Employer For Not Implementing PF & ESI ? - CiteHR
Harsh Kumar Mehta
Consultant In Labour Laws/hr
Prasad P K
Persuing Mba Degree In Hr
GOD_LEO19
Jr. Hr Manager
Vikramtrivedi007
Pf & Esic Consultant
Diwan_bisht123
Manager Hr
+4 Others

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Please tell me , how much fine has to be paid by an employer for not implementing PF & ESI in his Company?
Hi If act is applicable to your establishment then you should have to pay ESI and PF dues with Interest and damages. Vikram Trivedi Labour Laws Consultant Mob: 8898841995
Sir(s),
If any factory or specified establishment is coverable under ESI Act, 1948, but not covered, following penalties etc. will be payable on coverage of the unit lateron as and when detected and found to be coverable:
1. The unit will be covered retrospectively from the very date from which the same qualifies for coverage.
2. The employer will not be able to deduct the employees' share of contributions from the wages of the employees for the past period, but will be required to deposit the same.
3. interest will be liable to be recovered from employer for such late deposit of contributions.
Similar type of provisions exist in EPF & Misc. Provisions Act also.

Dear Singh,
The employer is liable to pay simple interest @12% with effect from 01.10.05 from each day of default.
If any contribution payable under this Act is not paid by the Principal Employer on the date on which such contribution has become due for payment, he shall be liable to pay simple interest at the rate of 12% per month or such higher rate as may be specified in the regulations till the date of its actual payment.
RATE OF INTEREST:
Up to 19.10.1989- 6%
20.10.1989 to 31.08.1994 – 12%
01.09.1994 to 30.09.2005 – 15%
01.10.2005 onwards – 12%
Regards
Raju

ours is manufacturing and marketing company but employer is not willing to cover us under esi and pf. how can we take action without disclosing name. r we eligible for same as we are drawing 30thousand every month and amount is credited directly in bank but no pay slip is generated but at the end of year we get form 16a.
i dont know how employer is manipulating things. can anybody help us out?

Sir(s),
The employees getting wages Rs. 30000/- per month (as mentioned by the member in above remarks) are neither coverable under ESI Act, nor under EPF & Misc. Provisions Act. The member has not mentioned as to in what way the employer is manipulating the things.

For not implementing ESI and PF in the company after the eligibility as per the act, The respective Inspectors will be giving notices.
You have to pay both the shares as an employer for the back period.
You cannot recover from the employees for the back period. This will be a big expenditure/burden to the company.
Besides this, you are liable for penal consequences as per acts i.e. you are liable for fine, interest, damages and for imprisonment also.
Please implement soon and try to avoid the same
D.Gurumurthy

Apart from what seniors has advised, the penalty will be upto a Maximum of Rs. 10,000/- with a maximum imprisonment of upto 3 years as decided by the inspector.
Dear mr singh, regarding your query: Pls tell me your co total strength? All employees are drawing rs.30000/-pm through bank?
Sir(s),
I may mention that the penalties and imprisonment under provisions of Act are not imposed by the Inspectors. On filing prosecution cases by ESIC under relevant provisions of the ESI Act, 1948 the Hon'ble Courts having jurisdiction decide such matters and impose penalties and imprisonments as they consider appropriate in the case. Only under damages provisions, damages are imposed by the concerned Department and that too at senior level after affording opportunity of hearing to the principal employer.
I will request the member, who recorded remarks as above to kindly indicate the provisions of Act/Rules/Regulations which provide for award of penalties and imprisonment by Inspectors.


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