Liability of ESIC and PF Contributions
Our company is facing a problem related to the liability of ESIC and PF contributions. The company currently employs around 300 employees. The issue is that the company has a large section of unskilled employees or laborers earning a small income. Employees earning wages or salaries of around Rs. 5000 to Rs. 6000 are not agreeing to sign the forms of ESIC and PF because they don't want ESIC and PF to be deducted from their salary as they receive a very small amount after all deductions.
Additionally, there are some employees who work only for 1 or 2 months and then leave the job, causing serious problems for the company as all the contributions of the company are wasted when these employees depart. The company has also hired workers through contractors such as security guards.
According to ESIC, it is the company's liability to deduct ESIC from the contract workers as well. As for PF, it is the contractor's responsibility to deduct PF, but the contractors are unable to do so, leading the company to bear the liability. Please suggest some solutions according to the ESIC and PF Act. Are there any exemptions or rules for solving the aforementioned problem?
Regards
From India, Mumbai
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Our company is facing a problem related to the liability of ESIC and PF contributions. The company currently employs around 300 employees. The issue is that the company has a large section of unskilled employees or laborers earning a small income. Employees earning wages or salaries of around Rs. 5000 to Rs. 6000 are not agreeing to sign the forms of ESIC and PF because they don't want ESIC and PF to be deducted from their salary as they receive a very small amount after all deductions.
Additionally, there are some employees who work only for 1 or 2 months and then leave the job, causing serious problems for the company as all the contributions of the company are wasted when these employees depart. The company has also hired workers through contractors such as security guards.
According to ESIC, it is the company's liability to deduct ESIC from the contract workers as well. As for PF, it is the contractor's responsibility to deduct PF, but the contractors are unable to do so, leading the company to bear the liability. Please suggest some solutions according to the ESIC and PF Act. Are there any exemptions or rules for solving the aforementioned problem?
Regards
From India, Mumbai
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There is no solution to this situation, but you can counsel your employees about the facilities provided by the ESIC, such as free medical and other benefits, as well as the savings and investments offered under the EPF schemes. Entrust the matter to your training and development team of the HR department. Let it be their responsibility.
Regards,
Madhu.T.K
From India, Kannur
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4528Regards,
Madhu.T.K
From India, Kannur
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hi frnds i am agrree to the suggestion given by madhu, you can tel to them about the benefits or positive points regarding the pf & esic Regards
From India, Chandigarh
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From India, Chandigarh
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Please go through the benefits of ESIC.
Benefits under ESI
The section 46 of the Act envisages the following six social security benefits:
- (a) Medical Benefit
- (b) Sickness Benefit (SB)
- 1. Extended Sickness Benefit (ESB)
- 2. Enhanced Sickness Benefit
- (c) Maternity Benefit (MB)
- (d) Disablement Benefit
- 1. Temporary disablement benefit (TDB)
- 2. Permanent disablement benefit (PDB)
- (e) Dependants' Benefit (DB)
- (f) Funeral Expenses
An interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fixed percentage of the worker's wages, whereas they are provided social security benefits according to individual needs without distinction.
Cash Benefits are disbursed by the Corporation through its Local Offices (LOs), Mini Local Offices (MLOs), Sub Local Offices (SLOs), and pay offices, subject to certain contributory conditions.
In addition, the scheme also provides some other need-based benefits to insured workers. These include:
- i. Rehabilitation allowance
- ii. Vocational Rehabilitation
- iii. Unemployment Allowance (Under Rajiv Gandhi Shramik Kalyan Yojana)
Medical Benefits
Type of Medical Benefits Provided
The Employees' State Insurance Scheme provides full medical care in the form of medical attendance, treatment, drugs and injections, specialist consultation, and hospitalization to insured persons and also to members of their families where the facility for specialist consultation and hospitalization has been extended to the families.
For the families, this benefit has been divided into two categories as under:
Full Medical Care
This consists of hospitalization facilities and includes specialist services, drugs and dressings, and diets as required for in-patients.
Expanded Medical Care
This consists of consultation with the specialists and the supply of special medicines and drugs as may be prescribed by them in addition to the out-patient care. This also includes facilities for special laboratory tests and X-Ray examinations.
Apart from the curative services provided through hospitals and dispensaries, the Corporation also provides the following facilities, including family welfare services.
Immunization
The Corporation has embarked upon a massive program of immunization of young children of insured persons. Under this program, preventive inoculation and vaccines are given against diseases like diphtheria, pertussis, polio, tetanus, measles, mumps, rubella, tuberculosis, etc.
Family Welfare Services
Along with the immunization program, the Corporation has been undertaking the provision of family welfare services to the beneficiaries of the Scheme. The Corporation has organized these services in 180 centers besides reserving 330 beds in hospitals for undertaking tubectomy operations. So far, 828,976 sterilization operations viz. 176,197 vasectomies and 652,779 tubectomies have been performed up to 31.3.1999. The ESI Corporation has also extended additional cash incentive to insured persons to promote acceptance of sterilization methods by providing sickness cash benefit equal to the full wage for a period of 7 days for vasectomy and 14 days for tubectomy. The period for which cash benefit is admissible is extended beyond the above limits in the event of any complications after family planning operations.
Supply of Special Aids
Insured persons and members of their families are provided artificial limbs, hearing aids, and artificial appliances like spinal supports, cervical collars, walking calipers, crutches, wheelchairs, and cardiac pacemakers as a part of medical care under the Scheme.
Sickness Benefits
Sickness Benefit represents periodical cash payments made to an IP during the period of certified sickness occurring in a benefit period when the IP requires medical treatment and attendance with abstention from work on medical grounds. Prescribed certificates are Forms 8, 9, 10, 11 & ESIC-Med.13. Sickness benefit is roughly 50% of the average daily wages and is payable for 91 days during 2 consecutive benefit periods.
Qualifying Conditions
(i) To become eligible for Sickness Benefit, an IP should have paid contributions for not less than 78 days during the corresponding contribution period.
(ii) A person who has entered into insurable employment for the first time has to wait for nearly 9 months before becoming eligible for sickness benefit because his corresponding benefit period starts only after that interval.
(iii) Sickness Benefit is not payable for the first two days of a spell of sickness except in the case of a spell commencing within 15 days of closure of the earlier spell for which sickness benefit was last paid. This period of 2 days is called the "waiting period." This provision should be clearly understood by IMOs/IMPs as actual experience shows that such IPs who want to avail medical leave on flimsy grounds generally come for the First Certificate/First & Final Certificate within 15 days of the earlier spell, usually on unpaid holidays and/or on each weekly off, etc., to avoid the loss of benefit for 2 days due to a fresh waiting period.
Extended Sickness Benefit
IPs suffering from long-term diseases were experiencing great hardship on the expiry of 91 days of Sickness benefit. Often they, though not fit for duty, pressed for a Final certificate. Hence, a provision for paying Sickness Benefit for an extended period (Extended Sickness Benefit) of up to 2 years in an ESB period of 3 years.
1. An IP suffering from certain long-term diseases is entitled to ESB, only after exhausting Sickness Benefit to which he may be eligible. A common list of these long-term diseases for which ESB is payable is reviewed by the Corporation from time to time. The list was last reviewed on 5.12.99 and revised provisions of ESB became effective from 1.1.2000, and at present, this list includes 34 diseases which are grouped into 11 groups as per the International Classification of diseases, and the names of many existing diseases have been changed as under:
- I Infectious Diseases
- 1. Tuberculosis
- 2. Leprosy
- 3. Chronic Empyema
- 4. AIDS
- II Neoplasms
- 5. Malignant Diseases
- III Endocrine, Nutritional, and Metabolic Disorders
- 6. Diabetes Mellitus-with proliferative retinopathy/diabetic foot/nephropathy.
- IV Disorders of the Nervous System
- 7. Monoplegia
- 8. Hemiplegia
- 9. Paraplegia
- 10. Hemiparesis
- 11. Intracranial Space Occupying Lesion
- 12. Spinal Cord Compression
- 13. Parkinson's disease
- 14. Myasthenia Gravis/Neuromuscular Dystrophies
- V Disease of the Eye
- 15. Immature Cataract with vision 6/60 or less
- 16. Detachment of Retina
- 17. Glaucoma
- VI Diseases of the Cardiovascular System
- 18. Coronary Artery Disease:
- a. Unstable Angina
- b. Myocardial infarction with ejection less than 45%
- 1. Congestive Heart Failure- Left, Right
- 2. Cardiac Valvular Diseases with failure/complications
- 3. Cardiomyopathies
- 4. Heart disease with surgical intervention along with complications
- VII Chest Diseases
- 5. Bronchiectasis
- 6. Interstitial Lung Disease
- 7. Chronic Obstructive Lung Diseases (COPD) with congestive heart failure (Cor Pulmonale)
- VIII Diseases of the Digestive System
- 8. Cirrhosis of liver with ascites/chronic active hepatitis
- IX Orthopedic Diseases
- 9. Dislocation of vertebra/prolapse of intervertebral disc
- 10. Non-union or delayed union of the fracture
- 11. Post Traumatic Surgical amputation of the lower extremity
- 12. Compound fracture with chronic osteomyelitis
- X Psychoses
- 13. Sub-group under this head is listed for clarification
- a. Schizophrenia
- b. Endogenous depression
- c. Manic-Depressive Psychosis (MDP)
- d. Dementia
- XI Others
- 1. More than 20% burns with infection/complication
- 2. Chronic Renal Failure
- 3. Reynaud's disease/Buerger's disease.
1. In addition to the above list, the Director-General/Medical Commissioner is authorized to sanction ESB for a maximum period up to 730 in cases of rare but treatable diseases or under special circumstances, such as adverse reactions to drugs which have not been included in the above list, depending on the merits of each case, on the recommendations of RDMC/AMO or other authorized officers running the medical scheme.
2. To be entitled to the Extended Sickness Benefit, an Insured Person should have been in continuous employment for 2 years or more at the beginning of a spell of sickness in which the disease is diagnosed and should also satisfy other contributory conditions.
3. ESB shall be payable for a period of 124 days initially and may be extended up to 309 days in chronic suitable cases by Regional Dy. Medical Commissioner/Medical Referee/Administrative Medical Officer/Chief Executive of the E.S.I. Scheme in the State or his nominee on the report of the specialist(s).
Enhanced Sickness Benefits
It was introduced w.e.f 1.8.1976 as an incentive to IPs/IWs for undergoing Vasectomy/Tubectomy. Insured Persons eligible for ordinary sickness benefit are paid enhanced sickness benefit at double the rate of sickness benefit i.e., about a full average daily wage for undergoing sterilization operations for family welfare. The duration of enhanced Sickness Benefits is up to 7 days in the case of Vasectomy and up to 14 days in the case of the Tubectomy from the date
From India, Pune
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Benefits under ESI
The section 46 of the Act envisages the following six social security benefits:
- (a) Medical Benefit
- (b) Sickness Benefit (SB)
- 1. Extended Sickness Benefit (ESB)
- 2. Enhanced Sickness Benefit
- (c) Maternity Benefit (MB)
- (d) Disablement Benefit
- 1. Temporary disablement benefit (TDB)
- 2. Permanent disablement benefit (PDB)
- (e) Dependants' Benefit (DB)
- (f) Funeral Expenses
An interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fixed percentage of the worker's wages, whereas they are provided social security benefits according to individual needs without distinction.
Cash Benefits are disbursed by the Corporation through its Local Offices (LOs), Mini Local Offices (MLOs), Sub Local Offices (SLOs), and pay offices, subject to certain contributory conditions.
In addition, the scheme also provides some other need-based benefits to insured workers. These include:
- i. Rehabilitation allowance
- ii. Vocational Rehabilitation
- iii. Unemployment Allowance (Under Rajiv Gandhi Shramik Kalyan Yojana)
Medical Benefits
Type of Medical Benefits Provided
The Employees' State Insurance Scheme provides full medical care in the form of medical attendance, treatment, drugs and injections, specialist consultation, and hospitalization to insured persons and also to members of their families where the facility for specialist consultation and hospitalization has been extended to the families.
For the families, this benefit has been divided into two categories as under:
Full Medical Care
This consists of hospitalization facilities and includes specialist services, drugs and dressings, and diets as required for in-patients.
Expanded Medical Care
This consists of consultation with the specialists and the supply of special medicines and drugs as may be prescribed by them in addition to the out-patient care. This also includes facilities for special laboratory tests and X-Ray examinations.
Apart from the curative services provided through hospitals and dispensaries, the Corporation also provides the following facilities, including family welfare services.
Immunization
The Corporation has embarked upon a massive program of immunization of young children of insured persons. Under this program, preventive inoculation and vaccines are given against diseases like diphtheria, pertussis, polio, tetanus, measles, mumps, rubella, tuberculosis, etc.
Family Welfare Services
Along with the immunization program, the Corporation has been undertaking the provision of family welfare services to the beneficiaries of the Scheme. The Corporation has organized these services in 180 centers besides reserving 330 beds in hospitals for undertaking tubectomy operations. So far, 828,976 sterilization operations viz. 176,197 vasectomies and 652,779 tubectomies have been performed up to 31.3.1999. The ESI Corporation has also extended additional cash incentive to insured persons to promote acceptance of sterilization methods by providing sickness cash benefit equal to the full wage for a period of 7 days for vasectomy and 14 days for tubectomy. The period for which cash benefit is admissible is extended beyond the above limits in the event of any complications after family planning operations.
Supply of Special Aids
Insured persons and members of their families are provided artificial limbs, hearing aids, and artificial appliances like spinal supports, cervical collars, walking calipers, crutches, wheelchairs, and cardiac pacemakers as a part of medical care under the Scheme.
Sickness Benefits
Sickness Benefit represents periodical cash payments made to an IP during the period of certified sickness occurring in a benefit period when the IP requires medical treatment and attendance with abstention from work on medical grounds. Prescribed certificates are Forms 8, 9, 10, 11 & ESIC-Med.13. Sickness benefit is roughly 50% of the average daily wages and is payable for 91 days during 2 consecutive benefit periods.
Qualifying Conditions
(i) To become eligible for Sickness Benefit, an IP should have paid contributions for not less than 78 days during the corresponding contribution period.
(ii) A person who has entered into insurable employment for the first time has to wait for nearly 9 months before becoming eligible for sickness benefit because his corresponding benefit period starts only after that interval.
(iii) Sickness Benefit is not payable for the first two days of a spell of sickness except in the case of a spell commencing within 15 days of closure of the earlier spell for which sickness benefit was last paid. This period of 2 days is called the "waiting period." This provision should be clearly understood by IMOs/IMPs as actual experience shows that such IPs who want to avail medical leave on flimsy grounds generally come for the First Certificate/First & Final Certificate within 15 days of the earlier spell, usually on unpaid holidays and/or on each weekly off, etc., to avoid the loss of benefit for 2 days due to a fresh waiting period.
Extended Sickness Benefit
IPs suffering from long-term diseases were experiencing great hardship on the expiry of 91 days of Sickness benefit. Often they, though not fit for duty, pressed for a Final certificate. Hence, a provision for paying Sickness Benefit for an extended period (Extended Sickness Benefit) of up to 2 years in an ESB period of 3 years.
1. An IP suffering from certain long-term diseases is entitled to ESB, only after exhausting Sickness Benefit to which he may be eligible. A common list of these long-term diseases for which ESB is payable is reviewed by the Corporation from time to time. The list was last reviewed on 5.12.99 and revised provisions of ESB became effective from 1.1.2000, and at present, this list includes 34 diseases which are grouped into 11 groups as per the International Classification of diseases, and the names of many existing diseases have been changed as under:
- I Infectious Diseases
- 1. Tuberculosis
- 2. Leprosy
- 3. Chronic Empyema
- 4. AIDS
- II Neoplasms
- 5. Malignant Diseases
- III Endocrine, Nutritional, and Metabolic Disorders
- 6. Diabetes Mellitus-with proliferative retinopathy/diabetic foot/nephropathy.
- IV Disorders of the Nervous System
- 7. Monoplegia
- 8. Hemiplegia
- 9. Paraplegia
- 10. Hemiparesis
- 11. Intracranial Space Occupying Lesion
- 12. Spinal Cord Compression
- 13. Parkinson's disease
- 14. Myasthenia Gravis/Neuromuscular Dystrophies
- V Disease of the Eye
- 15. Immature Cataract with vision 6/60 or less
- 16. Detachment of Retina
- 17. Glaucoma
- VI Diseases of the Cardiovascular System
- 18. Coronary Artery Disease:
- a. Unstable Angina
- b. Myocardial infarction with ejection less than 45%
- 1. Congestive Heart Failure- Left, Right
- 2. Cardiac Valvular Diseases with failure/complications
- 3. Cardiomyopathies
- 4. Heart disease with surgical intervention along with complications
- VII Chest Diseases
- 5. Bronchiectasis
- 6. Interstitial Lung Disease
- 7. Chronic Obstructive Lung Diseases (COPD) with congestive heart failure (Cor Pulmonale)
- VIII Diseases of the Digestive System
- 8. Cirrhosis of liver with ascites/chronic active hepatitis
- IX Orthopedic Diseases
- 9. Dislocation of vertebra/prolapse of intervertebral disc
- 10. Non-union or delayed union of the fracture
- 11. Post Traumatic Surgical amputation of the lower extremity
- 12. Compound fracture with chronic osteomyelitis
- X Psychoses
- 13. Sub-group under this head is listed for clarification
- a. Schizophrenia
- b. Endogenous depression
- c. Manic-Depressive Psychosis (MDP)
- d. Dementia
- XI Others
- 1. More than 20% burns with infection/complication
- 2. Chronic Renal Failure
- 3. Reynaud's disease/Buerger's disease.
1. In addition to the above list, the Director-General/Medical Commissioner is authorized to sanction ESB for a maximum period up to 730 in cases of rare but treatable diseases or under special circumstances, such as adverse reactions to drugs which have not been included in the above list, depending on the merits of each case, on the recommendations of RDMC/AMO or other authorized officers running the medical scheme.
2. To be entitled to the Extended Sickness Benefit, an Insured Person should have been in continuous employment for 2 years or more at the beginning of a spell of sickness in which the disease is diagnosed and should also satisfy other contributory conditions.
3. ESB shall be payable for a period of 124 days initially and may be extended up to 309 days in chronic suitable cases by Regional Dy. Medical Commissioner/Medical Referee/Administrative Medical Officer/Chief Executive of the E.S.I. Scheme in the State or his nominee on the report of the specialist(s).
Enhanced Sickness Benefits
It was introduced w.e.f 1.8.1976 as an incentive to IPs/IWs for undergoing Vasectomy/Tubectomy. Insured Persons eligible for ordinary sickness benefit are paid enhanced sickness benefit at double the rate of sickness benefit i.e., about a full average daily wage for undergoing sterilization operations for family welfare. The duration of enhanced Sickness Benefits is up to 7 days in the case of Vasectomy and up to 14 days in the case of the Tubectomy from the date
From India, Pune
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As per the Factories Act, companies should pay a minimum wage to workers or foremen, not like Rs 5000 or Rs 6000. Following the Minimum Wage Act, workers will receive fair remuneration after all these deductions, and they will comply with ESI contributions.
From India, Hyderabad
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From India, Hyderabad
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PF ESIC.xls
PF contributions[8 7].docx