Employee Linked Incentive (ELI) Scheme – Benefits, Eligibility & Impact

Employee Linked Incentive (ELI) Scheme – Benefits, Eligibility & Impact

by with No Comment Labour ActNews & Updates
Introduction:

The Employee Linked Incentive (ELI) Scheme is a major initiative launched by the Union Government in the Union Budget 2024-25, to address the country’s growing unemployment challenges. India is currently facing high levels of unemployment among the youth, underemployment, and a mismatch between the skills and industry demand. The ELI scheme is proposed to stimulate the private sector to participate in job creation and workforce development. The scheme seeks to incentivize and motivate employers to hire more youth, especially freshers while encouraging skill development and enhancing job retention.

The ELI Scheme is a package of 5 schemes to create more job opportunities and improve the livelihood of people across the country. The scheme envisages providing employment, skilling, and other opportunities for 4.1 crore youth over five years with a total central outlay of ₹ 2 lakh crore. Out of this, 1.07 crore is allocated to implement Plan A, B, and C, ₹63,000 crore for Plan D to provide an Internship programme for skilling 1 crore youth in 5 years, and ₹30,000 crore for Plan E for upgrading of Industrial Training Institutes (ITI’s) across the country.

The package highlights the government’s strong commitment to tackling unemployment and boosting economic recovery, especially after the challenges posed by COVID – 19 pandemic.

The Objectives:

The ELI Scheme hopes to address the country’s growing unemployment by incentivizing the private sector for job creation, skill development, and retention.

The main objectives are:

  1. Promote the employment of youth: The scheme primarily aims to reduce unemployment among the youth by encouraging organizations to recruit youngsters especially those joining the workforce for the first time.
  2. Encourage job retention: The ELI scheme has features to encourage job retention by offering incentives to employers who maintain higher workforce levels over a period of time, especially those who recruit beyond a specified threshold.
  3. Encourage Skill Development: Skilling has been the Government’s objective, and this initiative aligns with this aim. This is achieved by encouraging skill development among the youth, by motivating employers to invest in training and skill development of their workforce.
  4. Enhance Formal Employment: Historically, industries have depended on informal labour. This scheme aims to formalize employment by incentivizing employers who transition workers into the formal economy by providing social security such as Provident Fund (PF) coverage.
  5. Boost employment in the Manufacturing Sector: The Scheme has features that target the Manufacturing Industry to boost job opportunities by promoting the recruitment of first-time-employees.
  6. Reduce Economic Disparity: the Scheme aims at reducing economic disparity and improve social mobility by prioritizing on job creation and skill enhancement for youth especially those from the underprivileged backgrounds.
  7. Assist Employers in recruitment: The programme aims to lower the expenses of employers and motivate them to increase their employment levels by providing financial assistance such as reimbursing employers for their PF contributions towards new hires.
The Schemes

The Employment Linked Incentive Schemes encompass 5 programs aimed at employment generation, retention, workforce formalization, skill development, and enhancing full compliance with all statutory rules and regulations.

The total outlay for the entire scheme is ₹2 lakh crores for 5 years. Out of this, ₹1.07 lakh crore is allocated for Scheme A, B, and C to generate employment for 3.1 crore new employees, ₹ 63,000 crore is allocated for Internship Programme for skilling 1 crore youth in 5 years, and ₹30,000 crore for upgrading of Industrial Training Institutes (ITI’s)

Scheme A: First-time Employees Support Scheme

This scheme is designed for youth who are entering the formal workforce for the very first time. All newly joined employees in the formal sector will receive one month’s salary up to ₹15,000 to be disbursed through direct transfer in 3 installments. The first-time employment scheme is expected to benefit around 210 lakh youth over 2 years. The Central outlay for the scheme is ₹23,000 crores. Enrolment is open for 2 years and the expenditure coverage extends to 3 years. The subsidy paid under this scheme supports employees and boosts the hiring of first-time employees by employers.

The salient features of the scheme are briefed below:

  1. Applicable to all newly joined employees in the formal sector.
  2. Applicable to newly joined employees enrolled in EPFO and drawing a wage or salary of less than ₹ 1 lakh per month.
  3. Eligible employees will receive a subsidy of up to ₹ 15,000 directly in 3 installments.
  4. The eligible employee has to mandatorily undergo a financial literacy course to receive the second installment.
  5. The employer has to refund the subsidy to the employee if the employment ends within 12 months of recruitment.
  6. The scheme will be applicable for 2 years after enrolment with EPFO.
Scheme B: Incentives for Job creation in the Manufacturing Sector

This scheme is designed to enhance employment in the manufacturing sector. The scheme rewards both employers and first-time employees who contribute towards EPFO. The incentive will be paid at a specified scale to both the employee and employer directly based on the EPFO contributions made in the first 4 years of employment. The incentives will be paid partly to both the employees and employers for 4 years as detailed below:

Year Percentage
First year 24% shared equally between employee and employer
Second year 24% shared equally between employee and employer
Third year 16% shared equally between employee and employer
Fourth year 8% shared equally between employee and employer

This scheme is aimed at incentivizing employment in the manufacturing sector and is expected to benefit 30 lakh youth and their employers. ₹52,000 crore has been earmarked for this scheme. The program has a 2 year enrolment plan with the expenditure phase spanning 6 years. This will allow sustained support that will boost long term employment in the manufacturing sector.

The salient features of the scheme are briefed below:

  1. The scheme applies to first-time employees in the manufacturing sector.
  2. All corporate and non-corporate employers who have a 3-year track record with EPFO contributions will be eligible.
  3. Employees who contribute towards EPFO and who earn a wage or salary of up to ₹1 lakh per month will be eligible for this scheme.
  4. The employees must be directly employed by the organization that pays the salary.
  5. Where the salary of the employees exceeds ₹25,000 per month, the incentive will be calculated at the capped amount of ₹25,000 per month.
  6. If the employment ends within 12 months of recruitment, then the employer will refund the subsidy to the employee.
  7. The scheme requires the employer with a 3-year EPFO contribution to hire either 50 new employees or 25% of their workforce, whichever is lower to qualify for the incentive.
  8. Employers should maintain the enhanced level of employment throughout, failing which they will not receive the subsidy.
  9. The incentive will be paid over 4 years, shared equally between the employee and the employer as per the table given above.
  10. The scheme will apply to an employee for 2 years after enrolment with EPFO.
Scheme C: Support to Employers for EPFO contributions

The third scheme under the Employment Linked Incentive Scheme is to support employers who contribute towards EPFO. This is a fully employer focussed scheme that covers every additional employment within a salary of ₹1 lakh per month within all sectors.

The salient features of the scheme are briefed below:

  1. The scheme incentivizes employers who increase their workforce above the baseline (the previous year’s number of EPFO employees) by at least 2 employees for companies with less than 50 employees or 5 employees for companies with 50 or more employees and maintain this level.
  2. The scheme applies to employees earning up to ₹1 lakh per month.
  3. New employees need not be newly enrolled with EPFO.
  4. The EPFO will reimburse contributions paid by the applicable employer for the additional employees hired in the previous year up to ₹3,000 per month for 2 years.
  5. When the employer creates more than 1000 jobs, reimbursement will be done for every quarter.
  6. The subsidy will continue for the 3rd and 4th years on the same scale as employers benefit provided under job creation for manufacturing sector.
  7. The subsidy provided under this scheme is in addition to the subsidy provided under the first-time employment scheme.
  8. The scheme is applicable for 2 years after joining employment.

The Central outlay for this scheme is ₹32,000 crores and is expected to benefit 50 lakh youth. The program has 2 year enrolment duration and the expenditure duration is for 6 years.

Scheme D: Internship Scheme with Top Companies

The Internship Programme envisages skilling 1 crore youth aged between 21 to 24 years over 5 years in top 500 companies. The total outlay for the scheme is ₹63,000 crores.

The salient features of the scheme are briefed below:

  1. The duration of the Internship is 12 months with a monthly allowance of ₹5,000 and a one-time assistance of ₹6,000.
  2. Unemployed youth in the age group of 21-24 are eligible.
  3. The government will contribute significantly to the allowance costs, while the administrative and training expenses will be borne by the Company through CSR funding.
  4. Priority will be given to candidates with lower employability metrics.
  5. Actual skill training is mandatory with a focus on hands-on-work over classroom learning.
Scheme E: Skilling programme and upgradation of ITI’s

This is a scheme to skill youth with state and industry collaboration. This centrally sponsored scheme has a total outlay of ₹60,000 crores, where the Central Government spends ₹30,000 crores, the State Government spends ₹20,000 crores and the Industry ₹10,000 crores (this includes CSR funding).

The salient features of the scheme are briefed below:

  1. The objective is to skill 20 lakh youth so that industry standards can be met and employability enhanced.
  2. The programme envisages the upgradation and revamping of 1000 Industrial Training Institutes (ITIs), in a “hub and spoke” model with 200 hubs and 800 spokes nationwide with the cooperation of the industry.
  3. A complete Re-design and review of existing courses.
  4. Introduction of New courses with 1 and 2 year courses offered in all the 1000 ITI’s
  5. Offering specialized short-term courses in Hub ITI’s.
Key Takeaways of the Employment Linked Incentive Schemes

The ELI Scheme offers several key benefits and they are:

  1. Promoting Job Creation: the ELI scheme acts as stimulus to companies to hire more employees by offering incentives tied to EPFO Contributions. This will stimulate industrial growth and promote employment in various sectors.
  2. Supports fresh graduates and new entrants: The first-timers scheme helps to integrate fresh graduates and new entrants into the formal workplace. This scheme reduces the financial strain and ensures a smooth entry into the job market by providing a stable income at the start of a career.
  3. Strengthens financial security for employees: By incentivizing formal employment through EPFO contributions, the scheme ensures access to retirement benefits thus enhancing the long-term financial security of employees.
  4. Encourages workforce expansion for employe₹ The job creation in the Manufacturing sector scheme encourages employers to expand their workforce by linking incentives to EPFO contributions. This reduces the financial barrier for employers to hire more workers, helping the companies to meet the increasing demand and grow in the process.
  5. Reduces the financial burden of the employe₹ The Support to Employers scheme reimburses a portion of the EPFO contributions for newly hired employees. This specifically helps Small and Medium-sized Enterprises (SMEs) to reduce the cost of hiring, making it more viable for SMEs to expand their workforce.
  6. Boosts Economic growth: By creating more job opportunities and incentivizing businesses to hire, the ELI scheme ensures that the growth driven by other manufacturing incentives such as the PLI scheme, translates into actual long-term employment gains.
  7. Encourages the formalization of the workforce: Incentivizing the formal sector employment, this helps to transition workers from the informal sector to the formal sector, providing greater stability and access to social security benefits.
Conclusion

The Employment Linked Incentive (ELI) Scheme is a strategic approach by the Central Government to address the unemployment problem in the country and to drive economic growth. The incentives targeted at both employers and employees aim to create a more inclusive and dynamic job market. The initiatives under the ELI scheme will not only support workforce expansion and formalization but will also significantly enhance the financial relief to employers, especially SMEs, thus making it easier for them to grow and hire.

GetifyHR, with its vast experience in Payroll processing and HR Management, assures all stakeholders of our continued support in helping them to make use of these schemes to foster growth and job creation, and to ensure a thriving and sustainable business in the long term.

EPFO’s new flexible savings scheme

EPFO set for a Major Upgrade: Flexible Savings and Instant PF withdrawals through ATMs

by with No Comment Labour ActNews & Updates

The Employees’ Provident Fund Organization (EPFO) is poised to introduce ground-breaking upgrades through EPFO 3.0 slated for roll-out in June 2025. The upgrade will allow Provident Fund (PF) users to withdraw their savings using ATM cards thus bringing EPFO services closer to the banking experience. Other features include a revamped Mobile App, flexible pension options with enhanced digital security, faster claims, and better service. EPFO 3.0 represents a major leap that introduces a host of new features and reforms aimed at simplifying processes, reducing paperwork, and empowering employees to manage their PF accounts independently.

What is EPFO 3.0?

EPFO 3.0 is the upcoming phase of digital transformation introduced by the EPFO to make PF management more user-friendly, transparent, and efficient. Once these reforms are rolled out, employees can self-correct personal details such as name, date of birth, and marital status directly through the EPFO Portal. This will significantly reduce administrative time delays.

In addition to this, Provident Fund account transfers will no longer require verification by the employer due to the introduction of Aadhaar–based OTP authentication. Another rather interesting upgrade is the introduction of an EPFO ATM card that enables instant PF withdrawal through ATMs. The upcoming EPFO 3.0 Mobile app provides on-the-go account management, faster claim processing, and seamless access to retirement savings. Once rolled out, the system is expected to benefit millions of salaried employees who contribute to the EPF scheme.

Salient features of EPFO 3.0

EPFO 3.0 introduces a range of innovative features to streamline processes, enhance user convenience, and reduce administrative delays, thus empowering employees to manage their PF accounts.  This Employee Provident Fund Update is poised to change the way the funds are used and managed by the members.

  • User-Friendly Interface: The proposed revamp of the EPFO website will offer a robust, interactive, and user-friendly interface for seamless navigation and easier management of Accounts.

 

  • Self-correction of Personal Data: EPF members can now independently correct discrepancies or make changes in personal information like name, date of birth, gender, nationality, etc., directly through the EPFO Portal. This eliminates the need for employer approval or supporting documents in most cases.

 

  • ATM cards for instant EPF withdrawals: EPFO members will issue ATM Cards to members that function as debit cards. Members can directly withdraw their EPF savings from ATMs, offering Instant P.F withdrawal process in India, a first of its kind in the country. This will provide instant access to funds thus reducing the hassle of waiting for approval.

 

  • EPFO Mobile App: A new Mobile App is to be launched that will streamline the management of EPF Accounts. Through this Mobile App, members can check account balances, file claims, and access a wide variety of services. This is a one-stop solution for all EPFO-related tasks.

 

  • Reduction in PF Transfer time: Members can now file their PF transfer claims directly with EPFO using Aadhaar-based OTPs without employer intervention. This will significantly reduce the delays in transferring PF accounts when switching jobs.

 

  • Self Attestation features: EPFO proposes to introduce a self-attestation feature that will allow members to complete the Know Your Customer (KYC) process without the approval of the employer.

 

  • More Efficient Pension System: Employees are allowed to choose higher voluntary contribution towards Pension. The system also proposes support to the pension system that will make it more efficient with focus on addressing the delays in issuing pension payment orders.

 

  • Seamless User Experience: EPFO 3.0 aims to make all the processes starting from Account Management to filing of claims and transferring funds, more efficient, user-friendly and faster.

 

How do the EPFO 3.0 ATM Cards work?

EPFO ATM card is a revolutionary update being introduced in EPFO 3.0 that enables withdrawals from EPF accounts. As of now, members have to wait anywhere between 7 to 10 days for withdrawals from the EPF account. The process required either online or offline requests and employee attestation.

With the new features, members can access their PF accounts directly from designated ATMs for instant access of their funds without waiting for approval from employers. EPFO ATM withdrawal thus eliminates lengthy waiting time, and offers the much-needed convenience and instant access to their savings.

The EPFO ATM card functions like a regular Bank ATM card and allows members to withdraw up to 50% of their total savings in the PF accounts without lengthy approval processes. Similar to Bank ATM transactions, EPFO ATM transactions will require authentication via OTP, PIN, or Biometric verification for added security.

EPFO Mobile App

The proposed launch of the EPFO Mobile App through EPFO 3.0 is set to be a game-changer. The EPFO Mobile App will make it easier to manage your EPF account. It will allow you to quickly check your account balance, track contributions, and file claims from the convenience of your living room or when on the move through your Smartphone. The user-friendly interface is designed to save both time and effort, making it easier to have full control of your retirement savings and manage your account on the go. Regardless of whether you are at home or on the move, everything you need will be at your fingertips.

Flexibility in Pension Contributions

EPFO 3.0 proposes changes in Pension contributions by making it more flexible. Currently, EPF contributions are fixed at 12% of the Basic salary plus Dearness Allowance, split equally between the employee and employer. One part of the contribution goes into the Employees’ Pension Scheme (EPS). Under EPFO 3.0 the following changes are proposed.

  1. Employees are allowed to choose higher voluntary contributions towards Pension.
  2. They are given the flexibility to opt for different pension schemes.
  3. Enhancing benefits under EPS based on contribution levels.

This is EPFO’s new flexible savings scheme that aims to enhance retirement savings and provide employees with greater financial control and independence.

Self-Correction of Member Personal Details:

Currently, members have to depend on employers to correct discrepancies in the personal information on the EPFO Portal, resulting in undue delays and added Administrative pressure. However, with the EPFO’s new features, members can access their personal details and correct discrepancies without the requirement of supporting documents. The high volume of grievances is primarily related to member profiles and Know Your Customer (KYC) issues. This is nearly 27% of total complaints. These proposed changes aim to drastically reduce these grievances. For example, errors in details like father’s name, spouse name, etc., or nationality that hitherto required online requests and supporting documents, can now be quickly and efficiently updated, thus streamlining the entire process.

Eliminating delays in PF Transfers

For long, there has been a demand to reduce the delays in transferring PF Accounts when members switch jobs. Currently, employer verification is a key step often resulting in significant delay. On an average, the employers took 12 to 13 days to submit transfer claims to the EPFO. As per records, over the past 9 months nearly 20 lakh claims were held up with employers for more than 15 days.

EPFO 3.0 allows employees with fully compliant e-KYC EPF accounts to file transfer claims directly with the EPFO using Aadhaar-based OTPs, without requiring employer intervention. The proposed change is expected to significantly reduce transfer claim processing time by doing away with the bottleneck of employer verification.

EPFO 3.0 – Launch Timeline

Initial announcements revealing formal details about EPFO 3.0 began circulating in early 2023 highlighting the process of digitization and self-service enhancements. As a pilot phase which is still ongoing, certain features like online PF transfer and partial self-correction are already available like under EPFO 2.0.

According to official timelines, EPFO 3.0 is scheduled to be fully operational by June 2025 and will culminate in the complete roll-out of the new infrastructure that includes the EPFO ATM Card system, a revamped Mobile App, and flexible pension contributions.

Conclusion

EPFO 3.0 symbolizes an important step towards modernizing India’s Provident Fund Infrastructure. The aim is to deliver a hassle-free experience that benefits employees across the country, and this is emphasized in user autonomy, instant access to funds, digital security, and streamlining the entire workflow. Even though a few challenges remain, especially in implementing robust security measures and ensuring widespread digital literacy, the long-term prospects suggest a more robust, transparent, and member-friendly system.

In simple terms, EPFO 3.0, the latest updates on EPFO Reforms, is a comprehensive digital overhaul of the EPFO platform, that is designed to provide members greater control over their accounts, introduces ATM-enabled withdrawals and streamlines PF transfer with reduced paperwork.

GetifyHR is a highly reputed Payroll and Statutory Compliance Service Provider with years of experience in handling matters relating to Payroll and Statutory Compliance that includes Employees Provident Fund.  We are fully geared to handle all the proposed changes and will be able to fully support all our valued clients and the employees once these changes are notified. We are there to lend a shoulder to all these changes and all forthcoming changes in all aspects of Payroll Processing, HR Management and Statutory Compliance requirements.

statutory compliance blog

Statutory Compliance Checklist for Starting a Business in India

by with No Comment Labour Act

India is emerging as one of the fastest-growing economies globally and is projected to become the 3rd largest economy after the USA and China in the next few years. The Corporate sector has a major role to play in this growth and this can be achieved only when they adhere fully to all the statutory rules and regulations. Therefore, it is important that any startup, whether big or small, has to fully comply with these laws. In this article we have compiled a detailed statutory compliance checklist that will safeguard the business. We hope this would be a Start-up guidance for being fully compliant of all statutory requirements.

What are Statutory Compliance and the Risks of Non-compliance!

Statutory Compliance is a framework established by the Government to regulate the operations of a business and entails meeting legal, financial, and regulatory requirements. This includes how a business treats its employees, handles its finances and HR policies. Every company regardless of its size or industry has to ensure fair treatment of the employees, safe working conditions, and regular payment of salaries, taxes, and other benefits.

Statutory compliance is a legal framework and any non-compliance will attract legal proceeding that includes fines, legal issues and damage to reputation. Complying with these compliance deadlines ensures that you are:

  • Avoiding Legal pitfalls: Non-compliance or late filing can lead to fines, penalties, or more severe legal ramifications.
  • Streamlining Operational Efficiency: Regular compliance will ensure smooth operational efficiency and avoids last minute rushes that can disrupt the business processes.
  • Upholding Company Reputation: Being recognized as a compliant organization boosts stakeholder confidence and maintains business goodwill in the industry.

Companies in India, including start-ups must ensure compliance in 4 key areas.

1.  Industrial Relations

The provisions with regard to the payment of salaries and other benefits to employees top the list as they have to be strictly adhered to. To this effect, the provisions under the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, the Maternity Benefit Act, 1961, the Equal Remuneration Act, 1976, need to be strictly implemented. In addition to these, the Social Security contributions through the Employees Provident Fund and Miscellaneous Provisions (Amendment) 1992, The Employees State Insurance Act,1948, the Labour Welfare Fund and Payment of Gratuity Rules, 1976 have to be given due importance.

2.  Labour Laws

The provisions of the Labour Laws lays out the working conditions of the employees like fixed working hours, overtime, maintenance of workplace safety standards, and prevention of discrimination on the basis of race, colour, gender or sexual orientation.

3.  Tax Compliance

Tax compliance is the willingness of a taxpayer to abide by the applicable tax laws, file tax returns and pay the tax dues within the stipulated period. Tax compliance is, therefore, crucial for all businesses and being fully compliant will ultimately facilitate business growth. The types of tax compliance includes the Central taxes such as the Income Tax Act (IT), Goods & Service Tax (GST)and Customs Act and the State Government taxes like Professional Tax, Stamp Duty & Registration Fees Act, Road Tax & Motor Vehicle Act and Excise Duty. The relevant registrations like PAN, TAN, and GST are mandatory. The relevant Income Tax Returns, audits, GST Returns need to be filed along with the tax dues within the stipulated time.

4.  Additional Compliance

In addition to these there are compliance laws that pertain to environmental clearance, data privacy regulation and IP protection.

The Risks of Non-Compliance

Non-compliance of the Statutory Rules and Regulations can bring about potential harm to the entire working of the company. The risks stemming from non-compliance are far-reaching and can seriously affect the company’s credibility, performance, and overall growth. We envisage the following risks of non-compliance:

1.  Imposition of Fines and Penalties

Non-compliance can lead to the imposition of hefty fines and penalties by the concerned authorities. This will negatively impact the working of the company.

2.  Loss of Productivity and Revenue

The workplace is thrown into disharmony due to non-compliance especially if the social security schemes have not been complied with. This disharmony leads to a loss of productivity and revenue.

3.  Damages the Brand Image and Business Integrity

Non-compliance damages the Brand Image and Business Integrity of the company and this will negatively impact the company’s standing and growth.

4.  Loss of Customer Loyalty

Customer Loyalty is negatively impacted by non-compliance leading to loss in business volume.

5.  Government sanctions and license suspension

Non-compliance when serious and repeated many times will bring about sanctions and ultimately may lead to license suspensions by the government authorities.

Statutory Compliance Checklist

This Statutory Compliance Checklist has been designed keeping in mind the 4 key areas that companies need to be compliant with.

1.  Industrial Relations

Complying fully with the rules and regulations enshrined in the Acts pertaining to Industrial relations will ensure fair working conditions, smooth resolution of disputes, and prevention of discrimination in the workplace. These rules and regulations are meant to strengthen the interests of the employees and employers and pave the way for a fair and harmonious work environment.

1.1 Minimum Wages Act, 1948

The calls to pay Minimum wages to employees had been an oft-repeated demand much before India gained Independence, and this call fructified after Independence when the Minimum Wages Act was passed in the year 1948. The Act ensures the payment of minimum wages to employees and this figure is decided at the national, state or district levels. The minimum slab may be arrived at based on the occupation and cost of living of the region where the business operates.

The Act prevents the exploitation of employees and ensures that they receive fair remuneration for their work.

1.2 Payment of Wages Act, 1936

The Act was enacted in the year 1936 to ensure that the employees receive their wages on time and in full. The Act regulates the payment of wages and lays conditions on the timing, mode of payment and deductions from wages that are allowed. Depending on the number of employees, the wages have to be paid before the 7th or 10thday after the end of the wage period. Unauthorised deductions are prohibited and it limits deductions for fines, damages or advances to specified percentage of the wages.

1.3 Payment of Bonus Act, 1965

Any company having 20 or more employees is subject to pay an annual bonus under the Payment of Bonus Act, 1965. Under this Act, eligible employees are entitled a minimum bonus of 8.33% of their annual wages or ₹ 100/-, whichever is higher. There is a maximum cap of 20% bonus payable.

1.4 The Maternity Benefit Act, 1961

The Maternity Benefit Act, 1961 has been passed to protect the health and well being of pregnant women and new mothers in the workforce. Under the Act, eligible women employees are entitled to maternity leave of 26 weeks of which 8 weeks of leave can be availed before the expected date of delivery. Employers have to pay full wages during the maternity leave period, thus ensuring that pregnant employees can avail leave without facing any financial hardships.

1.5  EPF and ESI

The Employees Provident Fund & Miscellaneous Provisions (Amendment) Act, 1992 was enacted to implement social welfare and employee security measures. The Act requires the Employee to contribute 12% of the Basic salary + DA towards the Fund with an equal amount being contributed by the employer. These contributions accumulate during the service period and can be withdrawn at retirement, resignation, or in case of any emergencies. The Employer is entrusted with the job of maintaining these records and remitting the contribution amounts to the department every month without fail.

In addition to this, the Employees State Insurance Act, 1948 offers social security benefits to employees in case of sickness, maternity, disablement, or death due to occupational hazard. Both the employee and employer contributes towards this fund at 0.75% and 3.25% of wages respectively. These contributions fund the Employees State Insurance Corporation (ESIC) and provide medical and cash benefits to insured employees and their families.

Employers have to strictly adhere to the rules and regulations, and any non-compliance will entail payment of penalty of up to ₹ 10,000/- and may also have to face imprisonment of up to 3 years.

2.  Labour Laws

The labour laws are meant to safeguard employees from discrimination and exploitation on the grounds of gender. They enable all employees regardless of gender to be equally remunerated.

2.1 Equal Remuneration Act, 1976

This Act was passed to encourage gender equality as it prohibits paying women lower wages when compared to men for the same work. The purpose of this Act is to prevent discrimination against women and to economically empower them.

2.2  Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Act was enacted to prevent sexual harassment of women in the workplace and address them with diligence and in a fair manner. Any company that employees 10 or more employees has to form an Internal Complain Committee (ICC) to investigate sexual harassment complaints and is empowered to give verbal or written warning, transfer, suspend or terminate the accused if found guilty.

Not forming the ICC is non-compliance that would result in a fine of up to ₹ 50,000/- and additional fines will be imposed for additional non-compliance. The aggrieved employee can approach courts for legal action against the accused.

2.3 Health and Safety at the Workplace

This statutory compliance operates under the Factories Act and 12 other similar acts pertaining to Industrial Safety and Health.  The Occupational Safety, Health and Working Conditions Code, one of the Codes under the New Labour Laws subsumed these13 Acts.  The New Labour Laws were passed by parliament and notified by the Government, but is yet to be implemented.

The safety guidelines apply to all factories, mines, constructions sites and offices. The law and its rules ensure the prevention of occupational accidents, injuries and diseases. Non-compliance can lead to fines and legal action, leading to imprisonment for negligence as an employer.

2.4 Payment of Gratuity Act, 1976

Any company or start-up with 10 or more employees is governed by this Act. The Act envisages the payment of Gratuity to employees who have completed 5 years of service with the company. Contravention of the Gratuity Act can result in a fine of ₹ 20,000/- or imprisonment up to 2 years or both.

3.  Tax Compliances

The Government needs to mobilize significant amounts of tax to finance infrastructure development programs. Both the Central and State Governments impose taxes on companies that are required to comply with each of these tax laws. We can classify taxes in India into two types, namely Direct and Indirect Taxes.

3.1 Direct Taxes

Direct Tax is the Tax that a company or individual pays directly to the respective governments. Some of the Direct Taxes in India are:

  • Income Tax or Corporate Tax
  • Capital Gains Tax
  • Security Transaction Tax
  • Dividend Distribution Tax
  • Gift Tax
  • Wealth Tax

These taxes are levied based on the respective tax legislation. The Income Tax Act of 1961 requires corporate or start-ups to ensure that Tax Deducted at Source (TDS) is deducted according to taxable income of the assessee. Under the TDS rule, every payment made to an assessee is subject to a TDS deduction. Employees have to deduct TDS from the employees’ wages and remit it to the department. The employees can then file a TDS return to claim a refund of the deducted TDS.

3.2 Indirect Taxes

Indirect Taxes are levied on the consumption of goods and services. The amount of taxes has no direct linkage with personal income or business profit. The following are the Indirect Taxes levied in India.

  • Goods and Services Tax (GST)
  • Service Tax
  • Excise Tax
  • Entertainment Tax

For being compliant with the Indirect Tax laws, companies need to follow the underlying tax legislations. Voluntarily disclose taxable activities, remit the tax payments within the stipulated time limits, and perform tax audits and documentation.

GST is the most important Indirect Tax legislated by the government. The new GST rules were passed under the 10th Constitution Amendment Act of 2016. All companies are required to comply with the rules under these amendments. Service Tax, Excise Duty, Customs Duty, Entry Tax, Entertainment Tax, etc., are all consolidated under one single indirect tax, the Goods and Service Tax (GST). Though the implementation of GST is complex it is essential to know the category of GST applicable to one’s line of business and comply with the rules.

3.3 Tax Liabilities for Investors

Start ups that receive funds from Investors are subject to taxation as these investments are deemed as “Income from other sources”. This is taxed at corporate rates under sections 56(2) and 68 of the IT Act. Angel Tax i.e., tax levied on investments into a Company through sale of shares above market value have seen changes that makes it taxable now for foreign investments also.

3.4 Tax Liabilities of Foreign Companies in India

Foreign companies that set up units in India are also liable to pay taxes as the IT Act of 1961 and GST rules. The following table gives details of the Taxes and Compliance requirements of Foreign Companies in India.

Types of Tax Compliance Requirement
Direct Taxes – IT & TDS Filing of IT Returns,  TDS
Indirect Taxes – GST GST Dues and Returns
Investor Tax Taxes on Investments received
Foreign Company Taxes Pay taxes as applicable to Foreign Companies in India
4. Additional Compliance

These include the laws pertaining to Environmental clearance, Data Privacy, and IP Protection.

4.1 Environmental Clearance

The regulations fall under various Acts including the Factories Act, 1948, Environment Protection Act, 1986, Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981, Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2016 and the Companies Act, 2013. Non-compliance with any of these rules will attract heavy fines, license suspension, and even closure of the unit.

4.2 Data Privacy

Companies must put in place measures to protect the data privacy of employees and customers. The Data Protection Act of 2013 and the IT Act of 2000 spells out the rules to this effect. Preventing unauthorized access, utilization, and unwanted disclosures can damage the reputation of the company and attract fines and legal proceedings.

4.3 IP Protection

The Patents Act, 1970, the Trademark Act of 1999,the Designs Act of 2000, and the Copyright Act of 1957 provide the rules for IP protection. These regulations safeguard inventions, trademarks, and designs and prevent plagiarism. Non-compliance leads to prosecution.

Ways to combat Non-compliance with all Statutory Compliance rules and regulations.

We recommend 3 ways to be compliant of all the Statutory Compliance rules and regulations.

1.  Stay Updated and Audit Regularly.

Stay updated on all changes that take place in the rules and regulations. Conduct regular Audits to check your compliance performance. Your updated compliance trends and reports will help you to ascertain your readiness to be compliant always.

2.   Prepare a “What to do List”.

Draw a list of the due dates applicable to all the Statutory Compliance rules and regulations and track the performance. Conduct team meetings to review the process to confirm the completion of your operation to stay compliant. Such a plan will help to optimize costs, save time, and prevent negative results.

3.   Hire Professionals

You can get the assistance of Professionals who will be able to keep you updated on all the changes and maintain full compliance. This may pose to be an additional expense for start-ups; you cannot ignore the fact that being non-compliant would be more expensive.

Conclusion

Navigating the Statutory Compliance rules and regulations can be a very challenging task given the complexities of the compliance laws. Outsourcing this critical task to an external agency is the ideal solution for start-ups. GetifyHR is one of t he leading outsourcers of Payroll Processing and Statutory Compliance and an association with us would ensure greater accuracy and full adherence to all the compliance requirements. By outsourcing Payroll Services, businesses can reduce the risks associated with non-compliance and continue to focus on their core business activities.

GetifyHR offers a comprehensive solution for Payroll Processing and Statutory Compliance. With years of experience in handling this process, we ensure that start-ups can navigate through this complex set of rules and regulations with ease. Companies can handle their core business activities with greater focus and peace of mind, once they are confident that a tried and tested expert partner is efficiently handling their payroll and statutory obligations.

POSH Act

Comprehending the POSH Act 2013: An All-Inclusive Manual for Occupational Safety

by with No Comment Labour Act

Maintaining workplace safety is essential to creating a respectful, upbeat, and productive atmosphere. The Prevention of Sexual Harassment (POSH) Act is a crucial piece of legislation in India that aims to protect workers’ safety and dignity—especially that of women—in the workplace. This in-depth manual seeks to clarify the main points of the POSH Act and its role in improving workplace safety.

Overview of the POSH Act

2013 saw the enactment of the POSH Act, also known as the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act. It aims to shield female employees from sexual harassment at work and to offer a complaint resolution process. The Supreme Court of India’s 1997 Vishaka Guidelines, which emphasized the necessity of law to stop sexual harassment in the workplace, served as the foundation for the Act.

Important Clauses of the POSH Act

1. Sexual Harassment Definition

Sexual harassment is defined by the POSH Act as a broad range of unwanted acts or behavior (directly or indirectly), including advances and physical contact, requests or demands for sexual favors, sexually suggestive comments, the display of pornography, and any other unwanted physical, verbal, or nonverbal behavior of a sexual nature.

2. The Act’s Scope

The POSH Act applies to both the organized and unorganized sectors and protects all women, regardless of age or job position, whether they work directly or indirectly. It comprises regular workers, contract workers, ad hoc workers, trainees, interns, and even those who drop by the office.

3. Committee for Internal Complaints (ICC)

It is required for each organization with more than ten employees to set up an Internal Complaints Committee (ICC) in each branch or office. This provision guarantees a formal, structured procedure for handling complaints about harassment and discrimination in the workplace. The ICC is in charge of receiving employee complaints, looking into them thoroughly, and suggesting suitable measures to be taken against violators. This committee is essential to preserving organizational integrity, guaranteeing adherence to legal and ethical requirements, and preserving a respectful and safe work environment..

4. The LCC or Local Complaints Committee

The Act requires the District Officer to form a Local Complaints Committee (LCC) for workplaces with less than 10 employees or when the complaint is directed towards the employer. This guarantees that the POSH Act applies to every workplace.

5. Know the Difference

It’s critical to understand the differences between the International Criminal Court (ICC) and the Internal Complaints Committee (ICC). The latter is an international court that hears cases against defendants for crimes like crimes against humanity, war crimes, and genocide. It is situated in The Hague, Netherlands. The International Criminal Court has worldwide jurisdiction and resolves serious international crimes, in contrast to the organizational ICC, which deals with internal workplace disputes. Despite the fact that they both use the abbreviation “ICC” and engage in investigative procedures, their responsibilities, purviews, and functions differ significantly.

6. The Process of Complaint and Redress

A detailed procedure for submitting complaints is outlined in the POSH Act and it must to be completed in writing within three months of the incident. The employer or District Officer must receive the report from the ICC within 90 days of the investigation’s conclusion, and they have 60 days to implement the recommendations.

7. Secrecy

The POSH Act places a strong emphasis on maintaining secrecy throughout the complaint process, from filing to inquiry to suggestion implementation, in order to safeguard the complainant’s privacy and dignity.

Interesting Insights into POSH:

The Act, which went into force on December 9, 2013, aims to shield women against sexual harassment at work and offers procedures for filing complaints and seeking remedies if such an instance occurs. Employers’ obligations in this regard are outlined in the POSH Act, which includes disclosing complaint data in yearly reports.

Furthermore, the Securities and Exchange Board of India required all listed businesses to provide information on sexual harassment allegations in their annual reports starting in 2018.

The requirement for data pertaining to the Act’s execution to be disclosed is a useful addition to the legislation. It can facilitate efficient monitoring of the effectiveness of the law and act as a significant accountability mechanism.

Nevertheless, almost ten years later, there is still no publicly accessible database that compiles information from various employers and businesses. Finding trends and patterns across the sector is tough since the data is still dispersed over different business reports and frequently presented in unintuitive ways.

Stunning Statistics:

Together, the focal companies reported 161 cases in FY 2013–14, the first year the POSH Act went into effect. In a year, this figure shot up to 465.

The figures increased in every year that followed until the first year of the COVID-19 epidemic, FY 2020–21. Across the 300 companies, 586 incidents were reported overall, down from 961 cases in the previous year.

In FY 2021–2022, this number gradually rose to 767; the next year, it surged by 51.2% to 1,160. About 109 accusations of sexual harassment were settled against these companies in FY 2013–14. In FY 2014–15, this increased to 406.

But the number of instances that have been settled has generally lagged behind the number of complaints over time. In FY 2016–17, 2.1% fewer complaints were addressed than the previous year, despite a 12.9% increase in the number of reported instances.

In a similar vein, after FY 2020–21, the first year of the pandemic, the number of complaints increased dramatically, but the number of instances that were successfully resolved fell short.

Advantages of the POSH Law

POSH Act’s implementation offers the following advantages:

Establishes a Safe Work Environment:

It promotes a courteous and safe work environment, which is critical for both the health of employees and the organization’s general output.

Promotes Reporting:

The Act promotes victims’ coming forward without fear of reprisal by offering a transparent process for remedy.

Increases Awareness:

Consistent training and sensitization initiatives required by the Act increase knowledge of what sexual harassment is and how to stop these kinds of situations.

Assures Accountability:

The Act makes businesses responsible for maintaining a secure workplace and handling grievances in a timely and efficient manner.

GetifyHR and Safety at Work

We at GetifyHR recognize the value of a polite and safe work environment. Being a top supplier of payroll outsourcing services, we guarantee quick and accurate payroll processing in addition to providing complete compliance management solutions, which include POSH Act compliance. Our knowledgeable staff helps businesses establish Internal Complaints Committees, provide training programs, and make sure the Act’s legal requirements are met.

Organizations that engage with GetifyHR may concentrate on their main business operations while we handle their payroll and compliance requirements, guaranteeing a secure and law-abiding environment.

In summary

One important piece of law that attempts to give women a safe and respectable place to work is the POSH Act. Comprehending and executing the POSH Act’s provisions is not only legally required but also an ethical duty for all establishments. Establishing a respectful and safe culture can help firms increase employee happiness, lower attrition, and boost overall productivity.

GetifyHR is dedicated to assisting businesses diligently in their efforts to establish a secure and legal workplace. With our proficiency in compliance and payroll outsourcing services, we assist companies in managing the intricacies of labor regulations and guarantee POSH Act compliance. By working together, we can create a workplace where everyone is valued, respected, and feels safe.

Blog EPF

EPFO – Standard Operating Procedure for Joint Declaration

by with No Comment Labour ActNews & Updates

The Employees Provident Fund Organization (EPFO) has brought about changes to the Standard Operating Procedure (SOP) for receiving Joint Declarations for correcting mistakes in members’ Universal Account Number (UAN) profile, and employers’ EPF Accounts, and the procedure to be followed by the Field Office.

The notification to amend the SOP was released by the EPFO vide No: SU/2022/Rationalisation of work areas/Joint Declaration/17 dated 11-04-2024.

Purpose of the Amendment

The purpose of the amendment is to describe accurately and in detail the procedures of receipt of Joint Declaration for corrections in UAN profiles by the members and employers and the procedure to be followed by the field office in making these corrections. The proposed changes to SOP will make it easier and simpler to minimize both incompleteness and mismatches.

The changes would also ease the difficulties encountered in claim settlement due to data mismatches, especially in parameters such as:

  1. Name
  2. Gender
  3. Date of Birth
  4. Father’s Name/Mother’s Name
  5. Relationship
  6. Marital status
  7. Date of Joining
  8. Reason for Leaving
  9. Date of Leaving
  10. Nationality and
  11. Aadhaar Number.

The SOP for Joint Declaration aims to streamline the process of rectifying discrepancies in member profiles, thereby reducing claim rejection and minimizing the risk of impersonation and fraud through the manipulation of UAN.

The process

The process entails a collaborative effort between the employees and the employers with due authentication by a process of Initiation, Verification, and Approval by the Field Office (FO).

1.  Initiation

As and when a member files a Joint Declaration, it gets authenticated by the Employer. The submitted documents are then verified for accuracy by the designated Verifier within the FO.

2.  Verification

The modification request and supporting documents are then cross-checked by the designated Verifier to ensure compliance with EPFO guidelines and regulations.

3.  Approval

Upon verification, the JD is forwarded to the designated Approver for approval. This could be the Regional Provident Fund Commissioners (RPFC), Additional Provident Fund Commissioners (APFC), or other authorised officers of the organization.

List of acceptable documents that can be submitted for the different parameters

Name and Gender
  1. Aadhaar (mandatory)
  2. Passport
  3. Death Certificate
  4. Birth Certificate
  5. Driving License
  6. Service photo identity card issued by Central, State, UT Govt./PSU/ Banks
  7. School Leaving Certificate (SLC) or School Transfer Certificate (TC) or SSC certificate or Mark Sheet issued by Board/ University containing name and photograph.
  8. Bank passbook having the name and Photograph cross-stamped by the Bank Official.
  9. PAN Card/e-PAN
  10. Ration/PDS Photo Card
  11. Voter ID/e-Voter ID
  12. Pensioner Photo Card/Freedom Fighter Photo Card
  13. CGHS/ECHS/Medi-Claim Card with Photo issued by State/Central Govt/PSUs/Rashtriya Swasthya Bima Yojana (RSBY) Card.
Date of Birth
  1. Birth Certificate issued by the Registrar of Births and Deaths.
  2. School Leaving Certificate (SLC) or School Transfer Certificate (TC) or SSC certificate containing Name and Date of Birth or Marksheet issued by any recognized Government Board or University.
  3. Service records certificate issued by the Central/State Government Organizations.
  4. Where proof of date of birth is not available, a Medical Certificate issued by a Civil Surgeon after medical examination of the member and supported with an affidavit on oath by the member duly authenticated by a Competent Court.
  5. Aadhaar
  6. Passport
  7. PAN Card
  8. Central/State Pension Payment order
  9. CGHS/ECHS/Medi-Claim Card issued by Central/State/UTs Govts./PSUs having Photo & Date of Birth.
  10. Domicile Certificate issued by the Government.
Father / Mother name, and Relationship
  1. Passport of Father/Mother
  2. Ration card/PDS Card
  3. CGHS or ECHS/ Medi-Claim Card with photo issued by Central/ State Govt./PSUs.
  4. Pension Card
  5. Birth Certificates issued by Municipal Corporation, and other notified local Government bodies like Taluk, Tehsil, etc.
  6. Marriage Certificate issued by the Government.
  7. Photo ID card issued for schemes like Bhamashah, Jan-Aadhaar, MGNREGA, ARMY Canteen Card, etc., by Central/ State Govt.
Marital Status
  1. Marriage Certificate issued by the government
  2. Aadhaar Card
  3. Divorce Decree
  4. Passport.
Date of Joining
  1. Employee register
  2. Attendance register
  3. Appointment letter or any other document as establishments maintain under any central or State Labour Act
  4. Letter of establishment on the letterhead duly signed by the Employer or the Authorized Signatory showing the date of joining, supported by ECR of the employee during the said period.
Reason for Leaving
  1. Resignation letter
  2. A letter from the organization on their letterhead clearly stating the reasons for leaving, supported by the ECR of the employee during the said period.
  3. Termination letter issued by the employer to the employee.
  4. Any document as the organization deems fit to establish the reason for exit of the employee duly signed by the Employer or the authorized signatory of the organization on their letterhead.
Date of Leaving
  1. Resignation letter/termination letter
  2. Experience certificate or any other document an organization maintains under any Central or State Labour Act
  3. Wage slip/salary slip/full and final letter
  4. Letter of organization on their letterhead clearly stating the date of joining and duly signed by Employer or the authorized signatory.
Nationality
  1. Copy of Passport
  2. Copy of Person of Indian Origin (PIO) card issued by the Govt. of India
  3. Long Term Visa (valid) along with a Foreign passport (valid or expired) of country of origin issued to minority communities of Pakistan, Afghanistan and Bangladesh, namely Hindus, Christians, Sikhs, Buddhists, Jains, and Parsis.
  4. Valid Visa issud to a Foreign National along with a valid Foreign Passport.
  5. Tibetan Refugee Card (supported by one more ID)
Aadhaar
  1. Member Aadhaar card or e-Aadhaar card with details of linked active mobile phone.
Submission of Documentary Proof

All changes to parameters have been classified into Minor and Major changes and these have been detailed in Table 2 of the SOP.

All requests for Minor or Major corrections will have to be supported by documentary proof as prescribed in Annexure 1.  For Minor corrections, at least 2 documents from the list of documents mentioned in Annexure 1 for that particular parameter are required to be submitted. For Major corrections, at least 3 documents from the list of documents mentioned in Annexure 1 for that particular parameter are required to be submitted.

Frequency of Corrections

The SOP has fixed the frequency at which corrections to various parameters can be made through the Joint Declaration Form. The same is tabulated hereunder:

Sl. No. Parameters No.of times changes can be made

1.

Member Name

1
2. Gender

1
3.

Date of Birth

1
4. Father/Mother Name

1
5. Relationship

1
6. Marital Status

2

7.

Date of Joining

1

8.

Date f Leaving

1

9.

Reason for Leaving

1

10.

Nationality

1

11.

Aadhaar

1

The Procedure

The EPFO has streamlined the process of updating profile parameters by embracing digital technology thus making it accessible through the online platform. The process is simple and both the employees and employers alike can leverage the power of digital technology to submit the JD online.

Firstly, log on to the EPFO website at https://www.epfindia.gov.in/.  Then log into the Employee login using the Universal Account Number (UAN) and the Password. Employers can use their EPF credentials to log in. After logging in, click on the “Online Services” option on the portal and look for the Update or Correct EPF details, and select the Joint Declaration Form (JDF). Once the Form opens, fill in the required details accurately and ensure that all the details called for are filled in. Depending on the parameter that you are updating or changing, upload the supporting documents.

Next, submit the Form after fully verifying that the details provided by you are correct. After submission, you can track the status of the Joint Declaration Form submission through the EPFO portal and ensure that the processing is taking place and the details are fully updated.

Once the changes are approved, the member’s photo which is retrieved by the EPFO interface with UIDAI Aadhaar data will become visible in the member profile on their portal and the IT interface of various authorities.

Conclusion

Through this highly efficient and structured process, EPFO not only aims to maintain the profile integrity of the member but also hopes to minimize claim rejections and reduce the risk of impersonation and fraud. By leveraging technology through the Unified Portal Application, EPFO endeavors to enhance transparency, streamline efficiency, and usher in greater accountability in its operations. EPFO’s commitment to providing the best of technology for the benefit of employees and employers alike demonstrates a step towards a brighter and more streamlined future on social security and the management of EPF Accounts.

GetifyHR has been fully supportive of the needs of the employees and employers in handling EPF, and we have always updated ourselves immediately on all the changes brought in by EPFO from time to time. We are fully geared to handle these changes and support our clients and through them the employees in all aspects of EPF.

Life Certificate

What is the Life Certificate in PF and what are all its uses?

by with No Comment BusinessLabour Act

All Central and State Government employees are eligible to receive Pension on retirement at the age of 58.  The benefit was not available to employees in the private sector.  However, the Government of India, with the view to support the employees in the private sector legislated the Employees Provident Act in the year 1952.  Controlled by the Employees Provident Fund Organization (EPFO), the scheme envisages providing benefits to the employees in the private sector that they hitherto had no access to.  One such scheme under the EPF Act is the Employees Pension Scheme (EPS) which was launched in the year 1995 by EPFO to enable retirees in the private sector to get regular pension after retirement at the age of 58.

All pensioners, whether they are pensioners of the Private Sector, Central Government, the State Government or members of any Government Organization are eligible to receive pension upon retirement at the age of 58. These pensioners are required to submit an Annual Life Certificate (ALC) to the authorised Pension Disbursing Agency (PDA) like the authorized Banks, Post Office for further continuation of the pension.  This certificate has to be submitted in the month of November for receiving pension.  The ALC has to be submitted in the form prescribed in Annexure XIII of CPAO Booklet Scheme, 2021.  However, in case of pensioners of the age of 80 years or above, the Life Certificate can be submitted from 1st October onwards.

In order to get the Certificate the pensioner has to either personally present oneself before the Pension Disbursing Agency (PDA) or have it delivered to the Agency through the authority where they have served earlier.  This procedure was causing a lot of hardship to the pensioners, especially for the aged and infirm pensioners who cannot present themselves always before the agency to secure the ALC.  Moreover, many employees post retirement choose to move to different locations either to be with the family or for some other reasons.  This would pose a lot of hardship in getting the ALC from the Agency and adversely affect the receipt of pension in the subsequent months.

To overcome this problem, the Government initiated the Digital Life Certificate for Pension Scheme also known as the Jeevan Pramaan.  This scheme addresses this problem by digitising the entire process of generating the Life Certificate.  Jeevan Pramaan is a Biometric enabled digital service for Pensioners that streamlines the entire process and makes it easier and hassle free for pensioners.  Pensioners of the Private Sector,  Central Government, State government and any other Government Organization can take benefit of this facility.  By this process the presence of the pensioner before the Pension Disbursing Agency is done away with thus benefitting the pensioner and also cutting down on unnecessary logistical hurdles.

How it Works?

Jeevan Pramaan uses the Aadhaar Platform for Biometric authentication of the Pensioner.  On successful completion of the authentication, the Digital Life Certificate is generated.  This gets stored in the Life Certificate Repository, which again can be accessed by the PDA online.

How to Register?

Pensioners have to register first to receive the Jeevan Pramaan Patra or Life Certificate.  They can approach the nearest Citizen Service Center (CSC), Banks or Government Offices to register.  The filled in application has to be submitted here and the Biometric authentication using the Aadhaar will be conducted.  Once this is successful, a Jeevan Pramaan ID will be generated.

Alternately you can download a Mobile App or PC App to register online from the official website https://jeevanpramaan.gov.in.  For this purpose you will require Internet and STQC Certified Biometric Device.

The Jevan Pramaan Application can be downloaded from the official website.  Click on the download option to provide your email ID, Captcha and click on “I agree to Download”.  Enter the OTP that you receive in your email and click on “Download for WindowsOS”.  You will receive the download link in your email.  Click on this link and a Zip file containing the Jeevan Pramaan application will get downloaded.  You can unzip this file and follow the instruction provided in the client installation document.

Once the Jeevan Pramaan ID has been generated, the pensioner needs to connect to the Portal once again using another OTP.  Next he/she has to select “Generate Jeevan Pramaan” and enter the Aadhaar and mobile number.  Click on the generate OTP option and enter the OTP number that you receive on your email or mobile.  You will also be required to input the Pension Payment Order (PPO) number, the name of the Disbursing Agency, your name and a few other required information.

On successful completion of this operation, an SMS acknowledgement is sent to your mobile number including your Jeevan Pramaan Patra or Certificate.  The Certificate is stored in the Life Certificate Repository and is available anytime and anywhere for the Pensioner and the Pension Disbursing Agency (PDA).

This scheme is not available to remarried or re-employed pensioners.  They are required to submit the Annual Life Certificate in the conventional way to the Pension Disbursing Agency.

Conclusion

The Jeevan Pramaan Patra effectively addresses the problems faced by the Pensioners who have to present themselves in person at the Pension Disbursing Agency every year to continue getting their pension dues.  Under this scheme the pensioners have the option to generate Jeevan Pramaan Patra, either online or via a mobile app.  By using Jeevan Pramaan, a pensioner can now digitally provide proof of his/her existence to the authorities for continuity of pension every year, instead of requiring appearing in person before the Pension Disbursing Agency.  By employing biometric authentication to authenticate the pensioner’s identity, the scheme effectively prevents fraudulent activities.

This is a great boon to all beneficiaries and we at GetifyHR have been assisting our clients and their employees who have retired in effectively generating a vital document like the Annual Life Certificate.

EDLI Benefits

EPF Act – Family Cover through EDLI and its benefits!

by with No Comment Labour Act

Introduction

The Employees Provident Fund Organization (EPFO) is one of the two main Social Security schemes under the Government of India, the other being Employees State Insurance (ESI). The EPFO comes under the aegis of the Ministry of Labour and Employment and is responsible for the regulation and management of Provident Funds in the country. The EPFO manages and administers the Employees Provident Fund (EPF), Employees Pension Scheme (EPS), and Employees Deposit Linked Insurance (EDLI).

EDLI

All the members of the EPFO are covered under the insurance scheme known as EDLI or Employees Deposit Linked Insurance. In this article, we explain the key features of the scheme, eligibility, and benefits of the scheme.

The EDLI scheme was launched in the year 1976 to provide insurance cover to members of the EPFO. Through this scheme, the family of a member gets financial assistance in the case of the death of the member while in service. The insurance cover will depend on the salary drawn in the last 12 months of employment before death.

Under this scheme, there is no exclusion.

EDLI Contribution

The employees and employers contribute to the EPFO scheme and this contribution is split among the three schemes namely, Employees Provident Fund (EPF), Employees Pension Scheme (EPS), and Employees Deposit Linked Insurance (EDLI). There is no contribution from the Employees towards the EDLI scheme, whereas, the employee contribution is 0.5% of the Basic salary + DA, subject to a maximum of Rs:75/-. Eligibility kicks in only when the member has continuously worked for 1 year and is an active member of the EPF.

EDLI Calculation

The average salary drawn by the deceased member during the 12 months before death is taken for calculation of the EDLI benefit. 35 times the average salary in the last 12 months is taken for the calculation, subject to a maximum salary that is capped at Rs:15,000/-. The calculation is as follows:

35,000 x 15,000 = Rs: 5,25,000/-

To this amount, an additional bonus amount of Rs:1,75,000/- is added taking the total amount payable to Rs:7,00,000/-.

Eligibility to claim the EDLI Benefits

The insurance benefits can be claimed by the family members, legal heirs, and nominees of the member.

– Member of the family nominated by the member under the EPF scheme

– In case a nomination has not been made, all the members of the family except major sons, married daughters with major sons, and married granddaughters.

– In case there is no family and no nomination, then legal heirs.

– In the case of a minor, the guardian/family member/legal heirs.

Forms Required

To claim the insurance, the nominee, legal heir, and family member have to apply in EDLI Form 5 IF. The claim form has to be filled separately by each claimant and if the claimant is a minor, the guardian has to fill the form on his/her behalf.

The form has to be filled offline and has to be submitted to the regional EPF Commissioner’s Office along with the Death Certificate issued by the Employer, mentioning the date of death of the member. The Form should also mention the mode of fund transfer.

How to claim EDLI benefits?

  • The member should have been an active member of EPF at the time of death.
  • Form 5 IF has to be filled and submitted to the EPF Commissioner to get the insurance benefit.
  • The form has to be signed and certified by the employer.
  • Where there is no employer, the form has to be attested by any of the following officials:

– A gazetted officer

– The District Magistrate

– Member of Parliament or MLA

– President of the Village Panchayat

– Chairman/Secretary/Member of the Municipal or District Local Board

– Postmaster or Sub-Postmaster

– Regional Committee of EPF or Member of CBT

– Manager of the Bank in which the account is maintained.

Documents required for claiming EDLI

    • Death Certificate of the Member
    • Guardianship Certificate if a person other than the natural guardian files the claim on behalf of a minor family member/nominee/legal heir.
    • Succession Certificate in case the legal heir makes the claim
    • A copy of the canceled cheque of the Bank account to which the payment has to be made.
    • Where the member was last employed under an establishment that is exempted under the EPF Scheme, the employer of such establishment should furnish the PF details of the last 12 months under the certificate part and also submit an attested copy of the Member Nomination Form.

The EPF Commissioner is liable to settle the claim within 30 days failing which he is liable to pay interest @ 12% per annum from the stipulated date to the actual date of settlement.

The EDLI Scheme under the EPF Act provides critical support to the family members of a member who has died while in service. The family members, nominees, and legal heirs are eligible to get a maximum of ₹ 7,00,000 in the event of the death of the member in service. This is a great boon to the family at a very critical juncture.

GetifyHR has been able to provide strong support to clients across the country through its Payroll and HR management outsourcing module. This has provided our clients with a strong edge and helped them to improve the overall performance of the company. Through this outsourcing module, the entire gamut of Payroll processing and HR Management are handled seamlessly and efficiently. This has not only enhanced the performance of the company but has also ushered in a more harmonious work atmosphere.

Labour welfare fund

What is the Labour Welfare Fund and what are its benefits?

by with No Comment Labour Act

Introduction

The Labour Welfare Fund is an initiative by the Government of India to extend a measure of social assistance to employees in the unorganized sector.  It is a kind of financial assistance for workers to improve their working conditions and standard of living.

Out of the 36 states and Union Territories, only 16 States/UTs have so far implemented this Act. As per the Act, the employees and employers contribute towards this Fund, and in some states, the state also contributes.  Since the Fund is managed by independent states, the rules vary from one state to another.  Any business/industry that satisfies the criteria of number of employees required by the Act to come under its purview has to register with the concerned Labour Department of the state.

Eligibility

In Tamil Nadu, if a company has 5 or more employees on its payroll then it has to register with the Labour Department.  In Kerala, it is 2 or more employees and in Gujarat, it is 10 or more employees. Each State/UT has its own rules to become eligible for registration.

The Act is not applicable to all categories of employees, and depends on the wages earned and the designation of the employees.  Those employees who are in the managerial or supervisory position and drawing salary that is more than what is stipulated in the Act are not eligible for the Fund.  This will vary from state to state.

States/UTs that have implemented the LWF Act

The following States and Union Territories have implemented the Labour Welfare Fund Act:

  1. Andhra Pradesh
  2. Chandigarh
  3. Chattisgarh
  4. Delhi
  5. Goa
  6. Gujarat
  7. Haryana
  8. Karnataka
  9. Kerala
  10. Maharashtra
  11. Madhya Pradesh
  12. Odisha
  13. Punjab.
  14. Tamil Nadu
  15. Telengana
  16. West Bengal.

States/UTs that have not implemented the LWF Act

The following States and Union Territories have not implemented the Labour Welfare Fund Act:

  1. Andaman & Nicobar Islands
  2. Arunachal Pradesh
  3. Assam
  4. Bihar
  5. Dadra and Nagar Haveli
  6. Daman and Diu
  7. Himachal Pradesh
  8. Jammu and Kashmir
  9. Jharkhand
  10. Lakshadweep
  11. Manipur
  12. Megalaya
  13. Mizoram
  14. Nagaland
  15. Pondicherry
  16. Rajasthan
  17. Sikkim
  18. Tripura
  19. Uttar Pradesh

Amount of Contribution

The amount of contribution also varies from state to state.  The following table provides details of the contribution period, contribution amount and due dates for remittance of the contribution.

State/UT Contribution regularity Contribution Months Employee Contribution Employer Contribution Contribution Total Return & Due Date
Andhra Pradesh Annual December 30 70 100 Form F

Jan 31
Chandigarh Monthly April-March 5 20 25 Nil

Oct.15

Apr.15
Chattisgarh Half-Yearly June- Dec. 15 45 60 Form A

31 July

31 Jan
Delhi Half-Yearly June-Dec. 0.75 2.25 6 Form A

15 July

15 Jan.
Goa Half-Yearly June-Dec 60 180 240 Form A

31 July

31 Jan.
Gujarat Half-Yearly June-Dec 6 12 18 Form A1

31 July

31 Jan.
Haryana Monthly Jan – Dec 31 62 93 Nil

31 Dec
Karnataka Annual December 20 40 60 Form D

15 Jan.
Kerala Half-Yearly June-Dec 4 12 16 Form A

15 July

15 Jan
Maharastra Half-Yearly June-Dec 6/12 18/36 24/48 Form A1

15 July

15 Jan
Madhya Pradesh Half-Yearly June-Dec 10 30 40 Nil

15 July

15 Jan
Odisha Half-Yearly June-Dec 20 40 60 Form F

15 July

15 Jan
Punjab Monthly April-March 5 20 25 Nil

15 Oct

15 April
Tamil Nadu Annual December 20 40 60 Form D

15 Jan
Telengana Annual December 2 5 7 Form F

31 Jan
West Bengal Half-Yearly June-Dec 3 15 18 Form D

15 July

15 Jan.

How is the Labour Welfare Fund utilized?

The Labour Welfare Fund is utilized by the Labour Welfare Board to cover the following activities.

  • To provide Libraries
  • For Vocational Training
  • To provide adequate nutrition to children
  • Towards transport facilities
  • For the education of children, through scholarships
  • To provide Medical facilities for employees and dependents
  • To provide entertainment facilities to the employees – sports, art forms, music
  • To provide vacation facilities for employees and their families
  • For providing subsidiary occupation for women and unemployed persons.
  • To provide assistance for Natural and Accidental Death. In Tamilnadu an Accidental death Assistance of  ₹ 1,00,000 and  ₹5,000 towards funeral expenses is provided.  When death is natural, a sum of   ₹25,000/- assistance along with ₹5,000 towards funeral expenses is provided.

Conclusion

The Labour Welfare Fund Act is an important legislation to protect the interests of the workers, especially in the unorganized sector. However, only 16 states and UTs have so far implemented the Act. Though it has not been implemented in all the States and Union Territories in the country, many states and UTs are in the process of implementing them shortly.

GetifyHR is rightly placed to provide a perfect solution to companies that need to streamline their Payroll and be compliant with all the statutory requirements. As one of the top outsourcers of Payroll processing and HR Management, we have been providing exemplary service to our clients across the country. Our outsourcing module can seamlessly handle all aspects of Payroll processing with a high degree of accuracy enabling stress-free operations month over month. In the process, it also handles all the statutory requirements so that the company is compliant always.

Policies Shops and Establishment Act

What are the policies that should be maintained in a company that is covered by the Shops and Establishment Act?

by with No Comment Labour Act

Introduction

The Shops and Establishment Act was established to protect the rights of employees in commercial establishments like business houses, offices, stores, warehouses, hotels, amusement parks, theatres, etc., nationwide. The provisions of the Act form one of the most important regulations required to be complied with by businesses. Every state has framed its own separate Shops and Establishment Act. However, the scope of the Act is similar across the nation, barring a few minor changes from state to state.

The Shops and Establishment Act regulates the following areas:

– Working hours

– Rest intervals for employees

– Overtime eligibility

– Leave Policy

– Opening and Closing hours of the establishment

– Weekly holidays, national and religious holidays

– Wages for holidays

– Annual, Casual, Maternity, and Sick leave

– Time and conditions for payment of wages

– Deduction of Wages

– Termination conditions

– Cleanliness, lighting, and ventilation of premises

– Precautions against fire

– Prohibition of employment of children

– Employment of young persons or women

– Maintaining various records/registers

– Display of Notices-Certificates

The establishments that are registered under the Shops and Establishment Act have to frame certain policies that will enable them to comply with all the regulations of the Act.  Failure to do so will attract penalties and other penal actions.

This article articulates the policies and actions to be taken by establishments that are registered under the Shops and Establishment Act.

Registration:

Any company or establishment that is subject to come under the rules of the Shops and Establishment Act has to register with the Labour Department. These registrations have to be made within the days mentioned in the Act and this would differ from state to state. In some states, the registration has to be obtained within 30 days of the commencement of business, whereas, in some other states it is 60, 90, or even 180 days from the commencement of business.

Hours of Business – Opening and Closing hours:

This should be fixed in accordance with the provisions of Chapter III of the Act. Typically the Act specifies that an employee has to work for 48 hours a week and shall not work for more than 9 hours in a day.  This may vary from state to state.

Weekly, National, and Religious Holidays:

The Act provides for at least one-day weekly holiday. In addition to this, the employees are eligible for Casual Leave, Annual Leave, Sick Leave, and Maternity Leave as per the provisions of the Act in the states.

National Holidays may be common across the states but the Religious holidays may vary from state to state. A proper leave policy has to be maintained by the establishment.

Payment of Wages:

The Act provides that the employees are paid their wages on time and as per the employment contract. In addition to this paid leave can be availed by employees and this includes Annual Leave, Sick Leave, and Maternity Leave. Typically, employees are eligible for at least 12 days of paid leave per year and this may vary from state to state.

Overtime Wages:

Employees who work for extra hours are eligible for overtime wages and this should be paid in accordance with the rules.

Deduction of Wages:

Wage deduction policies should be as per the rules framed in the Act for such deductions.

Termination from Service:

Proper policies have to be framed as per Sec.66 the Act for Termination of Employees.

Employment of Children

The Act has provisions for the employment of children and this should be properly reflected in the policies of the establishment.

Employment of young persons and Women:

As per the Shops & Establishments Act, there are strict rules regarding the employment of young persons and women. These mostly pertain to the number of hours and working hours. These policies should be strictly maintained by the establishment.

Register and Records:

Specific Registers and records have to be properly maintained as per the Act. These include the Register of Employees, Register of Wages and Deductions, etc.

Cleanliness, Lighting, and ventilation of the premises:

The Establishment has to maintain a clean and dust-free workplace. Proper ventilation has to be provided on the premises with adequate lighting. The Act mandates that a safe and secure work atmosphere is provided to the employee.

Provisions for Fire Emergency

The Act envisages the need for having emergency exits in the event of fire risks.

Full-body Medical check-up:

All employees should undergo a full-body medical check-up by a certified surgeon or doctor at least once a year. These records have to be properly maintained.

Conclusion

Any establishment that comes under the purview of the Shops & Establishment Act has to strictly adhere to the rules and regulations, failing which they will be penalized.

These may be in the form of fines or in some cases imprisonment. Contravening these rules is a serious offense and it is therefore in the interest of the establishment to have clear policies that enable full compliance.

GetifyHR is one of the premier establishments providing strong support in managing Payroll and HR management through a well-established outsourcing module. With years of experience in this industry, we have provided exemplary service to our clients across the country. We have very effectively implemented all the requirements of the Shops and Establishment Act in our module and this has enabled our clients to be fully compliant with all the rules and regulations of the Act. This is an association that will enable you to conduct your business in a stress-free manner and thereby not only promote greater growth but also create a more harmonious workplace.

ESIC eligibility criteria and benefits

ESIC eligibility criteria and benefits for members and dependents!

by with No Comment Labour Act

The Employees’ State Insurance (ESI) scheme was launched by the Government of India with the primary objective of providing cover to employees from health-related contingencies such as permanent or temporary disablement, sickness, death due to injury caused during employment or occupational disease that adversely affects the earning capacity of the worker. Through this scheme, an employee will be able to overcome the financial burden due to such eventualities.

Eligibility

The ESI Act provides Medical cover and other benefits to employees in factories, business establishments like hotels, cinema houses, road transport, newspapers, educational and medical institutions, and shops wherein 10 or more persons are employed. The scheme offers benefits to both the employees and their dependents in case of any emergencies like hospitalization or accidents at the workplace.

As per the Act, any worker or employee earning wages up to ₹ 21,000 per month is entitled to these benefits.

The Benefits

The benefits that members or their dependents are eligible to receive have been spelt out in Section 46 of the Act. Members are eligible to receive six social security benefits and they are as follows:

  1. Medical Benefit
  2. Sickness Benefit
  3. Maternity Benefit
  4. Disablement Benefit
  5. Dependent Benefit
  6. Other Benefits
I.  Medical Benefit

Through this full medical care is provided to the Insured Person (IP) and his family members from the day of entering insurable employment. The family includes spouses, dependent children up to 18 years (if continuing education up to 21 years) dependent unmarried daughter, dependent infirm children, and dependent parents.

Also if the Insured Person is unmarried and his/her parents are not alive, the minor brother or sister wholly dependent on the earnings of the Insured person.

There is no ceiling on the expenditure incurred in the treatment of the insured person or his/her dependent. The Act also provides medical care to retired and permanently disabled insured person and their spouse on payment of a token annual premium of ₹ 120. The following are the provisions and benefits.

  1. System of Medicine
  2. Entitlement
  3. Benefits to retired persons
  4. Domiciliary Hospitalization
  5. Consultation with Specialists
  6. Investigation and Imaging Services
  7. In-patient treatment
  8. Artificial Limbs and Aids
1. System of Medicine

The Allopathic system of Medicine is the normal system of treatment. However, considering the request of a substantial number of workers to provide treatment in the Indian System of Medicine and Homoeopathy (ISM & H), treatment is now been provided through Ayurveda, Unani, Siddha, and Homoeopathy, and also through Yoga therapy.

The required certificates for availing of the benefits have to be issued by the concerned Insurance Medical Officer (IMO) or Insurance Medical Practitioner (IMP) appointed by the State government. This facility is available in 95 selected ESI Hospitals/Dispensaries throughout the country.

2. Entitlement

The State Government in consultation with the Corporation prescribes the level of entitlement benefits that members or their family members are entitled to. An IP or a family member can only avail of the medical benefits prescribed. All beneficiaries are entitled to reasonable medical, surgical, and obstetric treatment.

Entitlement of IPs

ESI Hospital / Dispensary / Diagnostic Centre and other recognized institutions offer the following treatment to all IPs.

– Outpatient Treatment

– Domiciliary Treatment

– Hospitalization as In-patient

– Full supply of Drugs, dressings, aids, appliances, and artificial limbs.

– Laboratory and Imaging services.

– Entitled to receive benefits under the Integrated family welfare scheme, MCH, and other national health programs.

– Ambulance service or reimbursement of conveyance charges for visiting hospitals or diagnostic centres.

– Medical Certification

– Other special provisions.

Entitlement of Family Members

Family members of an IP are entitled to one or other medical benefit:

– Full Medical Care which means all facilities entitled to IPs including hospitalization

– Extended Medical Care which includes all facilities provided to IPs but without hospitalization.

However, plans are afoot to provide uniform Medicare Care to family members in all implemented areas as the rates of contribution paid by the employee and employer are uniform across the country.

2.  Benefits to Retired IPs and Disabled Persons

Under Section 56 of the Act, a member on payment of a lump sum ₹ 120 for one year in advance, (₹ 10 per month) can avail of the following benefits:

– This benefit is available till the period for which the Insured person contributes. The insurance should not be for less than five years and the IP should have left insurable employment on attaining the age of superannuation or taken VRS or retired prematurely. The spouse is also entitled to this benefit.

– An insured person or his/her spouse who ceases to be in insurable employment on account of permanent disablement due to injury suffered during employment shall be entitled to receive medical benefits.

3.  Domiciliary Treatment

The IPs and his/her family members are entitled to free medical treatment at their residence when the patient’s condition is such that he/she cannot undertake travel to attend the clinic/dispensary. The concerned IMO/IMP is required to attend to the person at his/her residence. The IMO/IMP is required to maintain a proper record of the domiciliary visits in a register month-wise.

4.  Consultation with Specialists

As per the Act, Specialist consultation to IPs and members of their family is to be provided in areas with “Expanded” and “Full” Medical care. Specialist consultation may be provided at Specialist/Diagnostic Center’s, ESI Hospitals, and at such other institutions where Specialists/Super Specialists have been appointed on a full-time/part-time basis.

Such Specialist Consultations are available in specialties like General medicine, Surgery, Pulmonary Medicine, Obstetrics and Gynaecology, Paediatrics, Ophthalmology, ENT, Orthopaedics, Cardiology, Neurology, Urology & Nephrology, Gastroenterology, Endocrinology, Oncology, and many other specialties.

5. In-Patient Treatment

In areas with “FULL” Medical Care facilities, the family members are entitled to hospitalization. IPs are eligible for hospitalization in all areas. All ESI Hospitals provide in-patient treatment. This facility is also available by reservation of beds in hospitals owned by the State government, or in Private institutions, or by constructing annexes to such institutions.

6.  Investigation and Imaging Services

The IPs and family members are entitled to free Laboratory Investigation and Imaging Services. The Imaging facilities include CT Scans, MRI & Echo-Cardiograph. These services can be availed from state-level specialty hospitals or other institutions that have tie-up with ESIC.

7. Artificial Limbs and Aids

IPs and their family member are provided the following Artificial Limbs and aids as part of the medical care under the ESI scheme.

Artificial Limbs, Hearing Aids, Wigs (for women beneficiaries only), Cardiac Pacemaker, Wheelchair/Tricycle, Spinal support, Cervical Collar, Crutches, Surgical Boots, Hip Prosthesis, intra-Ocular Lens, and any other aids or appliances prescribed by the Specialist. Apart from this, Spectacles, Artificial Dentures, and Artificial Eyes are available to the IPs only. The expenses incurred for purchasing artificial limbs and aids are met from the shareable pool of expenditure on medical care.

II.  Sickness Benefits

Sickness Benefit is a benefit in the form of cash compensation payable to the IPs during periods of certified sickness. 70% of average daily wages are payable to the IP up to a maximum of 91 days in a year on condition that the insured person has contributed for 78 days in a contributory period of 6 months.

1. Extended Sickness Benefit

Continuous insurable employment for two years with 156 days contribution in four consecutive periods is required to avail of this benefit if suffering from 34 specified long-term diseases.

The benefit is available for 309 days which may be extended up to two years on medical advice up to 60 years of age and can be availed during a period of three years. Rate: 80% of the average daily wages.

2. Enhanced Sickness Benefit

Payment of contribution for 78 days in the corresponding contribution period of six months

This benefit is payable to IPs undergoing sterilization for family planning. Full wages are paid for 7 days for Vasectomy and 14 days for Tubectomy, and are extendable on medical advice. The rate of payment is 100% of the daily average wages.

III.  Maternity Benefit

Payment of contribution of 70 days in two preceding contribution periods (one year).

Benefit: Up to 26 weeks in case of normal delivery and up to 6 weeks in case of miscarriage, that is extendable by 4 weeks on medical advice. For insured women with two or more surviving children Maternity Benefit will be for 12 weeks. Rate: 100% of the average daily wages.

IV. Disablement Benefit

1. Temporary Disablement Benefit

From day one of entering insurable employment irrespective of  having paid any contribution and payable for employment injury cases only.

Benefit: As long as temporary disablement lasts.  Rate: 90% of the average daily wages.

2.  Occupational Diseases

The Occupational Diseases is defined in the third schedule of ESI Act, 1948 and as confirmed by the Special Medical Board are treated as Employment injury.

Benefit: As long as temporary disablement lasts.  Rate: 90% of the average daily wages.

3.  Permanent Disability Benefit

Same as in the case of temporary disablement but after Medical Board decision.

Benefit:  For whole life.  Rate: 90% of the average daily wages if permanent disability is total.  In case of partial disablement proportionate to the loss of earning capacity.

V.  Dependent Benefit

If the IP is deceased and the cause of death is due to employment injury or occupational hazard, then the benefit is paid to the dependents of the deceased IP.

To the widow for life or until her re-marriage. To children till the age of 25 years. To dependent parents for life.

Rate: 90% of the average daily wages shareable in fixed proportion.

VI. Other Benefits

1. Funeral Expenses

From day one of entering insurable employment and if eligible for any benefit as an insured person. Rate:  Actual expenses subject to a maximum of ₹ 15,000 (w.e.f. 01-03-2019).

2. Confinement Expenses

Confinement expense is paid to a woman IP or an IP in respect of his wife in case the confinement occurs in a place where necessary medical facilities under the ESI scheme are not available.

Benefits: Up to two confinements only.  Rate: ₹ 5,000 per case.

In addition to the above, Vocational Rehabilitation benefit is provided to permanently disabled IPs for undergoing Vocational Rehabilitation training at the VT Centres. IPs are also eligible to receive Physical Rehabilitation benefits in case of physical disablement due to employment injury.

3. Unemployment Allowance

The IP also benefits from 2 schemes introduced by the Government:

1. Rajiv Gandhi Shramik Kalyan Yojana

This scheme was launched on 01-09-2005. In case of involuntary loss of employment due to closure of the establishment, retrenchment of due to permanent disablement due to non-employment injury and the contribution in respect of him have been paid/payable in for a maximum of 2 years prior to the loss of employment.

Benefit:  maximum twenty four months during the lifetime.  Rate:  50% of the average daily wages for first 12 months and thereafter 25% of average daily wages up to 24 months.

2. Atal Beemit Vyakti Kalyan Yojana

The ESI Corporation has introduced the Atal Beemit Vyakti Kalyan Yojana (ABVKY) with effect from 01-07-2018 as a welfare measure for employees who have been rendered unemployed.

Benefit:  Subject to the eligibility conditions, in the form of cash compensation up to 25% of the average daily wages up to 90 days, once in a lifetime, to be claimed after 3 months from unemployment in one or more spells.

4. Vocational Training

Vocational Training is provided in case of physical disablement due to employment injury.

Benefits: As long as vocational training lasts.  Rate:  Actual fee charged or ₹ 123 a day or whichever is higher.

5. Physical Training

Physical Training is provided in case of physical disablement due to employment injury.

Benefits: As long as a person is admitted in an artificial limb Centre. Rate:  100% of the average daily wages.

6. Skill Upgradation Training

Skill Upgradation Training is provided in case of physical disablement due to employment injury.

Benefits: For a short duration maximum up to 12 months.

7. Quota for MBBS/BDS Admission

The children of Insured Person/Insured Woman who satisfy the eligibility conditions as per the guidelines issued by ESIC Headquarters from time to tome published in the website www.esic.nic.in will be eligible for admission under IP quota in Medical Institutions.

Benefits:  MBBS/BDS seats are reserved for wards (children) of IP in ESIC Medical/Dental Colleges. The candidate should attend the NEET Examination and should find a place in the rank list.

Conclusion

The benefits provided to employees through the ESI scheme have enabled employees to withstand the financial pressures due to medical emergencies and injuries caused in the course of employment. Both the IPs and their family members have benefitted greatly from these schemes and they stand testimony to the various welfare measures introduced for the welfare of employees.

GetifyHR, one of the premier outsourcers of Payroll Processing and HR Management has been assisting clients across the country in all aspects of payroll processing and statutory compliance issues. We have been able to also assist employees to receive all their benefits so that they could tide over very serious crises in their life by way of hospitalization due to medical emergencies and injuries suffered during employment. This has enabled management to enjoy a greater rapport with the employees and has helped to promote positive growth.