Navigating ESI and PF in a New Job: Can You Share Your Monthly and Annual Steps?

Dear Friends,

If anybody is handling PF & ESI processes in a new organization, kindly inform me about the activities managed throughout the month and the appropriate steps to follow. I have theoretical knowledge, but please assist me with this.

Day by day, form by form (Challan), etc. Please describe the Challan process. Also, detail what needs to be done half-yearly and annually. This guidance is very important, so please provide assistance. If possible, kindly share any relevant sheets.

Regards,
Pankaj Sharma (9868923281)
New Delhi

Dear Pankaj,

The formalities for ESI are that you must have a minimum of 20 employees, regardless of whether they are earning a salary above or below 10000/-. The maximum ceiling for ESI contribution is up to 10000/- Gross/Month only. Those earning 10001/- or more will be exempted from ESI.

The employer must register the factory or establishment with the ESI Corporation within 15 days of the ESI Act becoming applicable. The registration declaration should be filled out in Form 01, along with a separate sheet containing the establishment's name and address, number of employees, nature of duties, and the name, designation, and address of the manager overseeing such individuals, particularly for offices located outside. Once the ESI regional office is satisfied with the application, they will assign a code number to the employer.

Only after this can you register your employees with the ESI. Employees must complete a declaration form FORM 1, clearly specifying their gender as Male or Female. All declaration forms must be countersigned by the employer.

Subsequently, prepare a return of declaration in Form 3 separately for Male & Female within 10 days of submitting the declaration form.

Each employee will then be given a temporary identification number.

For PF formalities, the company must be at least 3 years old before it can register with the PF department. Similarly, for this Act, the minimum number of employees required is 20.

Every employer of an establishment covered by the Employee Provident Fund Act must submit in duplicate Form 5A to the commissioner, providing details of all branches and departments, owners, directors, partners if any, or any other person controlling its affairs within 15 days of the scheme's applicability.

Upon receiving Form 5A, the commissioner will verify the details provided and, once satisfied, will assign an Establishment Code No.

I hope this clarifies everything for you. Feel free to reach out if you encounter any difficulties in understanding.

Regards,

Amit Seth

Hi Amit,

I'm very thankful to you, as I was undergoing a similar situation to Pankaj's, trying to get information about the ESI proceedings by the end of the day. I contacted a few consultants, but they all said they could come to the office and explain at their convenience. In the meantime, I decided to take a chance through this site, and I GOT IT AT THE RIGHT TIME.

Thank you very much for the brief explanation about the proceedings. It is of great help to all those facing similar situations.

Amit,

I'm back seeking your help for clarifying a few doubts in the ESI proceedings. I would like to understand whether 20 employees are inclusive of contract workers and office assistants. We have recently crossed 20 in number, maybe about one and a half months back. Due to a lack of knowledge and no proper guidance, we could not register ourselves with ESI. Can we now register with the ESI Corporation? If so, are there any fines or penalties levied on us?

Anticipate a timely reply. Thank you in advance.

Yes, the 20 employees are inclusive of all, including contract labor or corporate staff. Also, to clarify here, a new company should apply for PF registration immediately after its incorporation upon reaching 20 employees.

Additionally, there is a provision for voluntary registration of PF and ESIC when a company has fewer than 20 employees. In such cases, the employer can apply for voluntary PF or ESIC registration after all employees have agreed to the deduction of PF and ESIC as applicable to them.

For PF, visit epfindia.nic.in. For ESI, visit esic.nic.in.

Regards,
Umesh (umesh.chaudhary@ril.com) (welcomeumesh@ril.com)

Hi Umesh,

Thank you for your kind response with the details of websites and corrections related to PF. My email id is suma_ctc@yahoo.co.in. In anticipation of the presentation regarding ESI and PF, I would like to thank you in advance.

Hi Sumathi,

Yes, contract workers are also covered under the ESI Act. However, it is mainly the responsibility of their contractor to maintain their ESI status.

Yes, you should go ahead and register your office with the ESI. I think they will be convinced once they understand the real problems and will not impose any fines. I did the same in my previous assignment without facing any penalties.

In one of my previous organizations, nobody was registered with the ESI, even though our office had a sub-code allotted to them. I approached the responsible person and informed them about the actual issues, and the matter was resolved without any surcharge or fine.

I also successfully registered another office after a delay of 2 months without incurring any fines. So, it is not too late. Proceed to meet with the responsible person, and it will definitely be resolved.

Wishing you all the best.

Regards,
Amit Seth

Dear Pankaj,

Thanks for your comments.

Here, I would like to shed more light on the PF Act.

After obtaining an Establishment code number, the Employer is required to provide a list of all employees entitled to become members of the scheme on the date of its applicability, in Form 9 within 15 days of that date. This membership return should be accompanied by the nomination of each such employee in Form 2.

The employer must submit a monthly return in Form 5, providing the names and other details of new members. This form should be submitted within 15 days of the end of each month along with the nomination form of each member. If no new members join the fund in a month, then a "NIL" return should be submitted.

Additionally, the employer needs to present a copy of the wage payment register of fund members who have left the service within 15 days of the end of each month.

A monthly return of contributions in the prescribed form needs to be submitted within 25 days of the end of each month, along with triplicate copies of challans for the contribution amount and administrative charges deposited.

If no contributions have been collected, then a "NIL" return should be provided by the employer.

Finally, the employer is required to submit the annual return of contributions in FORM 6-A.

I hope it is now clear to you regarding the obligations of employers.

Regards,

Amit Seth.

Hi Amit & Pankaj (Umesh),

Thank you very much for the brief explanation about the proceedings of ESI & PF. I'm glad to see the participation and involvement of senior members of the site in such a humble way to help the beginners. I'm thankful to both of you for sharing your knowledge.

Hi Amit,

I have some confusion. Can you please send me an Excel sheet of the salary example where my salary is $10,500? I would like to know the contributions for ESI, PF, HRA, Conveyance Charges, and other important charges for an organization. Additionally, could you explain the Challans and Returns, both yearly and monthly?

Thank you,
Pankaj Sharma
9868923281

Dear Amit,

Is there a possibility of not having PF in an organization? Or if the employee wants to opt out of it, can he or she be out of the PF? Recently when I went for an interview, the panel asked me this question. Can you please clarify.

Regards, Renu

Hi Renu,

According to the Act, all those organizations that come under the eligibility criteria are liable to register themselves with the Fund. Only the appropriate Government is empowered to exempt any organization from the operation of all or any of the provisions of the scheme. However, there are some limitations regarding the type of establishments. For example, if the employees are also enjoying other provident fund benefits or if the employees of an establishment are enjoying provident fund, pension, or gratuity benefits that are not less favorable than the benefits under the Act.

So, we can say that these are the criteria to do the same.

Regards,
Amit Seth.

Dear Pankaj,

Regarding the salary package of 10,500/month, it will be exempted from ESI as the ceiling is only up to 10,000/-.

Regarding Challans and returns, the challan is submitted every month before the 21st in quadruplicate, i.e., four copies are required. It must be submitted along with the deposition of the contribution money at the nearby SBI Bank.

Returns are submitted every six months to the local ESI office along with complete details of employees, contribution amounts, and the submitted challans.

Regards,

Amit Seth

Hi Umesh,

Please send me also the presentation on PF and ESIC at my email id - [Login to view]. I am interested in this topic and want certain clarifications.

1. Has the salary for PF deduction been raised to the amount limit?
2. Has the salary for ESI deduction been raised to the amount limit?
3. What do A/c No. 1, A/c No. 2, A/c No. 21, A/c No. 22 stand for? Can somebody help me with this breakdown? Why have these A/c Nos. been designated, and what is their purpose according to the PF department?

PF ACCOUNTS
| A/C | EMPLOYER Cont. | EMPLOYEE Cont. | TOTAL |
|:---:|:--------------:|:--------------:|:-----:|
| I | 3.67% of Basic | 12% of Basic | 3.67% + 12% |
| II | 1.1% of Basic | - | 1.1% of Basic |
| X | 8.33% of Basic | - | 8.33% of Basic |
| XXI | 0.5% of Basic | - | 0.5% of Basic |
| XXII | 0.01% of Basic | - | 0.01% of Basic |
| TOTAL | 13.61% of Basic | 12% of Basic | 25.61% of Basic |

Regards,
Duke
[Login to view]

Dear Friends,

Kindly let me know how to get the ESI amount. Which forms need to be filled up? What formalities will be done by the employer? I am requesting you to please give me a reply as soon as possible.

Dear Amint,

I have gone through your advice. I really appreciate your answer, but in my organization, more than 500 employees are working. My manager told me to handle PF. They instructed me to fill the challan and submit Form No. 12A, 5, and 10. I really don't understand how I will do it. Kindly help me with this situation.

You can email me at hlipika@crmit.com.

Hi Satheesh,

I have read your message regarding obtaining an ESI number. Could you please clarify my doubts? We already have an ESI code for our establishment, and we started our sister concern in March 08. We are currently in the process of obtaining a PF number through a consultant, and now we need to get an ESI code.

I joined in the first week of July, and my COO has instructed me to start the process of obtaining the ESI number. Please advise on what steps to take next.

Kindly assist. You can reach me at vsatheesh_kumar@yahoo.com.

Regards,
Satheesh

Hi Pankaj,

I was in a pharmaceutical company in Kolkata for the last 5 years. In between, my service was discontinued for 3 months, so I got a new PF account on my resume. Now I have left the company and want to withdraw my PF from both accounts. How should I proceed? Please advise.

Dear All,

I am working in a service sector, and my concern falls under the Shops and Establishments Act. We have 10 branches spread across the state. Please let me know whether all the 10 branches need to be registered separately in their respective regions or if a single registration is sufficient for all 10 branches.

Eagerly awaiting your replies.

Warm Regards,
SSHIVA

Hi Pankaj,

I was in a pharma company in Kolkata for the last 5 years. In between, my service was discontinued for 3 months, so I got a new PF account on my resume. Now that I have left the company, I want to withdraw my PF from both accounts. How should I proceed? Please advise.

1. Fill out FORM 19 and FORM 10C with the old PF number and your details, and submit them to the respective PF office through your company.
2. Similarly, fill out FORM 19 and FORM 10C with the second allocated PF number and submit them to the respective PF office through your company.
3. Within 15 days to 1 month, you will receive the PF amount separately for both PF numbers.

Thank you.

I am working in a Pvt software company. We have a strength of more than 100 employees, but there is no PF contribution from the employer. Everybody has a basic salary of more than Rs. 10,000/-. I would like to know what the rules are for PF deduction. Should the company be 3 years old to deduct the PF....

Please reply ASAP as this is very urgent for me.

Hi Amit,

I have a small query. I am working in a franchise of Levi's store, and we have a total of 11 branches all over Gujarat and Maharashtra. We have not yet received the ESIC subcode for all our stores in Mumbai. Is it compulsory to pay the challans for Mumbai regions without the allocation of subcode numbers? Please help me and also advise if we need to issue separate cheques for the challans of each branch.

Please call me if you have any information on this matter.

Sashi
9909011744

Dear Sashi,

As you specified that you have the ESIC code and you have different outlets at different locations, you are supposed to get the sub-code for every different branch in different cities. The challan can be submitted at one place only, but the sub-code is required to provide the insurance cover to your associates in lieu of the contribution deducted.

Regards,

Amit Seth

Dear Sashi,

If you have the registered office with a Main ESIC code, there is a provision in the ESIC Act to pay the Challans in consolidated form at the main location until you receive the Sub code if you have applied for the same.

Hi Umesh,

Many participants are asking for a copy of your presentation on PF and ESI. Could you please post the PowerPoint (ppt) on this forum?

Thanks,
Naresh Parmar

Hello everyone!

Can anyone help me understand how exactly the ESIC Act works? What is the step-by-step process right from the beginning when an employee joins? Which forms are included? Any PowerPoint presentation or document that will help to understand would be appreciated.

Thanks & Regards,

Ashwini
[Login to view]

Hello Ashwini,

The ESIC Act applies to all employees whose gross salary is less than or equal to Rs. 10,000/-. Form 01 (Declaration Form) needs to be filled by the covered staff at the time of joining and should be submitted along with 3 copies of Return of Declaration Forms 03 separately for males and females.

The half-yearly return needs to be submitted to the branch office along with the copies of the submitted challans.

Regards,
Amit Seth.