Is it mandatory to get ESI and PF?

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Hi,

For workers around 18-20 people and getting around rs 8000/ gross salary.

  1. Is it mandatory to get ESI and PF?
  2. How much should be deducted?
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Hi Anisha,

With regard to EPF,

  • Every establishment that is a factory engaged in any industry that is specified under schedule I of the EPF Act, and, any establishment that has 20 or more persons employed has to register with EPFO.
  • The deductions i.e., the contributions by the employee and employer shall be as prescribed under section 6 of the EPF Act.

With regard to ESI,

In an area notified by the appropriate Government, all factories where 10 or more persons are employed, and the following establishments employing 10 or more persons have to be registered for ESI coverage.
(i) Shops
(ii) Hotels or restaurants not having any manufacturing activity, but only engaged in ‘sales’.
(iii) Cinemas including preview theaters;
(iv) Road Motor Transport Establishments;
(v) Newspaper establishments.(that is not covered as factory under Sec.2(12));
(vi) Private Educational Institutions (those run by individuals, trustees, societies, or other
organizations and Medical Institutions (including Corporate, Joint Sector, trust, charitable, and private ownership hospitals, nursing homes, diagnostic centers, pathological labs).
In some states, coverage is still for 20 or more persons employed. A few State
Governments have not extended the scheme to Medical & Educational Institutions.

The establishment can register for both EPF and ESI together at EPFO: Home (epfindia.gov.in).

To know more details, you can refer to The Employees’ Provident Fund & Miscellaneous Provisions Act,1952 (greythr.com), and The Employees’ State Insurance Act,1948 (greythr.com).

Regards,
Bhuvana Anand

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