Contributions - Employees State Insurance Act(1948), Industrial Laws | Industrial Laws - B Com PDF Download

All the employees working in the factories and establishments are to be insured in the manner provided by the Act. The contribution payable under this Act comprises of employee’s as well as employer’s contribution.

1. Rate of Contribution:

Section 39 deals with the rate of contribution payable by the employer and employee. The rate of contribution w.e.f 1.10.2005 are shown in the figure below:

Figure 6: Contribution under ESI Act 1948

• Contributions are to be paid in respect of wage period.
• The contribution falls due on the last day of the wage period.
• If the employee is employed for part of the wage period, or employed with more than one employer during the same wage period, then the contributions shall fall due on specified days.
• If any contribution is not paid on the due date by the principal employer, then he will have to pay simple interest at the rate of 12% p.a or at such specified higher rate till the date when actual payment .
• Any interest recoverable may be recovered as an arrear of land revenue as stated in Section 45B.
• No contribution is payable by or on behalf of the employee whose average daily wages are below the prescribed wages. (Section 42)

2. Payment of Contribution by Principal Employer:

• Section 40 states that the principal employer is required to pay in respect of every employee, whether directly employed by him or by an immediate employer. Both the employer’s and the employee’s contribution is to be paid by the principal employer.
• He can recover the employee’s contribution by deductions from the wages.
• No deduction can be made from employee wages on account of employer’s contribution.
• The principal employer bears the expenses of remitting the contributions to ESIC.
• The principal employer can recover the amount of contribution from the immediate employer if he has paid contribution in respect of employee employed by the immediate employer.

3. Manner and Time Period for Making Payment of Contribution

The total amount of contribution is to be deposited with the designated branches of SBI or other schedule bank authorised by ESIC by cash or cheque or DD on or before 21^st of the month following the calendar month in which the wages fall due. In case the day is a holiday, the contribution is to be made on the following day. The contribution is to be deposited through a challan in quadruplicate.

4. Contribution Period and Benefit Period:

The contribution period and the benefit period corresponding to it is given in the table below.

Table 3: Contribution and Benefit Period

5. Method of Payment of Contribution:

ESIC is responsible for making regulations in connection to method of payment of contribution. It shall make regulations for:

• The manner and time of payment of contribution.
• Payment of contributions by means of adhesive or other stamps affixed to.
• Making entries in the books or records of particulars of contribution paid.

6. Damages Payable:

The ESIC is empowered to recover damages from an employer in case of late payment of contribution or other amount due. The rate of damages on amount due are applicable as per the Regulation 31C of ESI (General) Regulations, 1950 and Section 85B (1) of the ESI Act. The details are given in the table below.

Table 4: Damages in Case of Late Payment of Contribution

7. Furnishing of Returns and Maintenance of Register

As per Section 44, principal as well as immediate employers are required to submit returns in specified forms with the requisite details relating to the persons employed by him to the ESIC.

They are also required to maintain such registers or records in respect of his factory or establishment as may be required by regulations.

The Social Security Officers appointed under Section 45 or other official of the Corporation authorised in this behalf by it may, have the power to enquire into the correctness of any of the particulars stated in any return or ascertain if any of the provisions of this Act has been complied with.