PF and ESI Compliances

A Labour Law Audit, also known as an Employment Law Audit or Workplace Compliance Audit, is a comprehensive review and assessment of an organization's practices and policies related to labor and employment laws. The primary objective of conducting a labour law audit is to ensure that the organization is in compliance with all relevant local, regional, and national labour laws and regulations. The scope of a labour law audit can vary depending on the size of the organization, the industry it operates in, and the specific legal requirements of the jurisdiction.

Typically involved in Provident Fund (PF) Compliances?

It provides the foundation for accurate financial reporting, tax compliance, and informed decision-making.

Employee Contribution

Both the employer and the employee contribute a percentage of the employee's salary (basic wage, dearness allowance, and retaining allowance) to the Employees' Provident Fund (EPF) account. The current contribution rate for employees is 12% of their basic wages and dearness allowance.

Employer Contribution

The employer also contributes an equal amount to the EPF account of the employee.

EPF Registration

Employers are required to register under the Employees' Provident Fund Organization (EPFO) if they have 20 or more employees. Registration is mandatory to comply with PF regulations.

Monthly Reporting

Employers need to file monthly PF returns and contribute the accumulated funds on behalf of employees to the EPFO. This involves submitting details of employee wages and contributions.

UAN (Universal Account Number)

A UAN is provided to each employee, which helps in tracking PF contributions and withdrawals throughout their career, even if they change jobs.

Employee Withdrawal and Pension

Employees can withdraw their PF balance upon retirement or resignation. Part of the contribution also goes towards the Employee Pension Scheme (EPS), which provides a pension after the employee's retirement.

Employee State Insurance (ESI) Compliance

Employee Coverage
  • Employees earning a salary of up to a certain threshold (as determined by the government) are eligible for ESI coverage. The current threshold is ₹21,000 per month (as of my last update in September 2021).
Employer Contribution
  • Employers contribute 4.75% of the employee's wages to the ESI fund, while employees contribute 1.75%.
ESI Registration
  • Employers with at least 10 employees (20 in some states) are required to register under the Employees' State Insurance Corporation (ESIC) and provide ESI benefits to eligible employees.
Monthly Reporting
  • Employers must file monthly ESI returns, reporting employee wages and contributions, and remit the contributions to the ESIC.

For PF (Provident Fund) Compliance

Employee Records
  • Form 9 - Employee registration form under the Employees' Provident Fund Scheme.
  • Form 5A - Return of ownership (to be submitted within 15 days of coverage under EPF).
  • Form 10 - Nomination and declaration forms by employees for provident fund benefits.
  • Form 12A - Statement of contributions to be submitted by the employer.
  • Form 2 - Monthly report of the employees who joined and left during the month.
  • Form 2 - Annual contribution card for each employee showing the employee's and employer's share of contributions.
  • Form 6A - Consolidated annual contribution statement for establishments having more than one PF account.
  • Form 5 - Monthly return of employees qualifying for membership during the preceding month.
  • Form 10C - Claims form for withdrawal benefits/scheme certificate under the Employees' Pension Scheme.
  • Form 19 - Claims form for final settlement under the Employees' Provident Fund Scheme.

For ESI (Employee State Insurance) Compliance

Employee Records
  • Form 1 - Employer's registration form under the ESI Act.
  • Form 3 - Employee's registration form under the ESI Act.
  • Form 5 - Employer's contribution periodical return.
  • Form 6 - Register of Employees.
  • Form 7 - Record of contributions in respect of each employee.
  • Form 9 - Accident Register.
  • Form 10 - Register of employees entitled to a Medical Benefit.
  • Form 11 - Accident book.
  • Form 12 - Half-yearly Return of Contribution.
  • Form 37 - Certificate of re-employment, continuing employment.
  • Form 69 - Certificate of entitlement.

    • Please note that these are general documents and forms that might be required for PF and ESI compliances in India. The specific documents needed could vary based on factors like the nature of your business, the number of employees, the location of your establishment, and changes in regulations