Are PF and ESI Violations Being Ignored in Your Company? Seeking Advice on Handling This Issue

My company in Chennai has its headquarters in Mumbai. I have been in the Chennai office for 1 year. To my knowledge, there is no evidence of challan payment for HR remittance in PF. Additionally, they have blindly been following that PF is exempted for Rs. 8000/- gross. Despite the employee strength being 80, they have no ESIC code. How is this possible? When I tried to explain the serious error, they did not listen. Are these issues not considered serious in Maharashtra?

I am employed as a Consultant. For the employees who have left the service, I have been providing PF claim forms 19/10c and forwarding them to Mumbai. I don't believe anyone has received the claimed amount from Maharashtra. I want to suggest to the management that they may opt for PF exemption if they are not serious about Employee/Employer PF. It always seems to be a problem with the erring employers and not the employees.

My heart goes out to the employees. Please suggest a remedy.

The number of employees only suggests whether the company is under EPF/ESI regulations. Definitely, your firm is to be covered. But there may be employees who are uncovered, such as those whose salary exceeds Rs 6500 at the time of joining (very important - AT THE TIME OF JOINING IF THE SALARY EXCEEDS RS 6500) is not covered by EPF Act. But once covered, he will continue to be covered irrespective of salary. Under ESI, it is Rs 10000, and those whose salary exceeds the limit will become uncovered from the next contribution period onwards.

The basic thing to be noted is that if PF/ESI is deducted from the salary, certainly, it should be remitted to the concerned account. Failing to do so, you are responsible for misappropriation of funds. Therefore, ensure that remittances are being done on time and returns submitted regularly.

Madhu.T.K

Dear Selva,

Greetings.

EPF and ESIC coverage have to be done for the eligible company by themselves. The law will not state that your company is applicable under these acts. Furthermore, any ignorance of the law cannot be considered an excuse for non-compliance.

The salary limit for coverage under the EPF Act is Rs. 6,500, and for the ESI Act is Rs. 10,000. Therefore, you should advise your management properly on these issues; otherwise, the ESI/EPF authorities have the right to summon you to pay contributions for the past period with penalties and interest.

Cheers,
Trisha
HR Professional