Type:Preventive Compliance
Frequency: Specific Day
Action to be taken:
To pay employers and employee's contributions at the rates prescribed by the Government into a bank authorised by the ESI Corporation.
Contributions are to be paid within 21 days of the last day of the calendar month when they fall due. Contributions fall due on the last day of the wage period for each group of employees. Delayed contributions will attract penal interest.
Contributions have to be paid even for employees employed through an immediate employer, and this amount recovered from the immediate employer. Contributions for these employees cannot be deducted from the employee's wages.
An employer can also fund contributions in advance as long as advances are always greater than contributions due. Any delayed contributions attract a penalty interest.
Audit Requirement:Have all ESI contributions for all eligible employees including Contract Employees for the month been deposited into an authorised bank under the ESI Act ?
Supporting Documents:Details of all contributions and deposits.
To be complied on the following days every year
21-January;
21-February;
21-March;
21-April;
21-May;
21-June;
21-July;
21-August;
21-September;
21-October;
21-November;
21-December;
Related Triggers:
Deduction or Fine From Wages
Payment of Wages
Related Keywords:
Contributions
ESI (Employee State Insurance)
Payment of Wages
Related Sections:
Employee State Insurance Act, 1948
Chapter:Contributions|
39:Contributions:
(1) The contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer's contribution) and contribution payable by the employee (hereinafter referred to as the employee's contribution) and shall be paid to the Corporation.
[(2) The contributions shall be paid at such rates as may be prescribed by the Central Government:
Provided that the rates so prescribed shall not be more than the rates which were in force immediately before the commencement of the Employees' State Insurance (Amendment) Act, 1989.]
[(3) The wage period in relation to an employee shall be the unit in respect of which all contributions shall be payable under this Act.]
(4) The contributions payable in respect of each [wage period] shall ordinarily fall due on the last day of the [wage period], and where an employee is employed for part of the [wage period], or is employed under two or more employers during the same [wage period], the contributions shall fall due on such days as may be specified in the regulations.
(5) (a) If any contribution payable under this Act is not paid by the principal employer on the date on which such contribution has become due, he shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may be specified in the regulations till the date of its actual payment: -
Provided that higher interest specified in the regulations shall not exceed the lending rate of interest charged by any scheduled bank.
(b) Any interest recoverable under clause (a) may be recovered as an arrear of land revenue or under Section 45-C to Section 45-I.
Explanation: In this sub-section, "scheduled bank" means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934.]
Employee State Insurance Act, 1948
Chapter:Contributions|
40:Principal employer to pay contributions in the first instance:
(1) The principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer,, both the employer's contribution and the employee's contribution.
(2) Notwithstanding anything contained in any other enactment but subject to the provisions of this Act and the regulations, if any, made thereunder, the principal employer shall, in the case of an employee directly employed by him (not being an exempted employee), be entitled to recover from the employee the employee's contribution by deduction from his wages and not otherwise:
Provided that no such deduction shall be made from any wages other than such as relate to the period or part of the period in respect of which the contribution is payable, or in excess of the sum representing the employee's contribution for the period.
(3) Notwithstanding any contract to the contrary, neither the principal employer nor the immediate employer shall be entitled to deduct the employer's contribution from any wages payable to an employee or otherwise to recover it from him.
(4) Any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted.
(5) The principal employer shall bear the expenses of remitting the contributions to the Corporation.
Employee State Insurance (General) Regulations, 1950
Chapter:Collection of Contributions Etc|
29:Payment of Contribution:
Contribution payable under the Act shall, except when otherwise provided, be paid into a Bank duly authorised by the Corporation.
Employee State Insurance (General) Regulations, 1950
Chapter:Collection of Contributions Etc|
31:Time for payment of contribution:
An employer who is liable to pay contributions in respect of any employee shall pay those contributions within 21 days of the last day of the calendar month in which the contributions fall due:
Provided that where a factory/establishment is permanently closed, the employer shall pay contribution on the last days of its closure:
Provided that an employer may opt, in such manner as may be prescribed by to the Director-General, for payment of amount in advance towards contribution to be adjusted against contributions payable by him (including employees contribution) for a wage period so that the balance of advance amount continues to be more than the contributions due and payable at the end of the concerned wage period. Such employer shall furnish in the prescribed pro forma (Form 5-A), a six-monthly statement of contributions payable and paid in advance with the balance left at the end of each month along with return of contributions to the appropriate regional office of the Corporation.
