PF (Provident Fund) and ESIC (Employees’ State Insurance Corporation) are important aspects of labor welfare and social security in India. Both PF and ESIC return filing are mandatory for employers to ensure compliance with the relevant laws.  Provident Fund or PF was implemented for the purpose of encouraging savings among employees and their retirement life. Contributions are made by the employer as well as employee on a monthly basis. PF contributions can only be withdrawn by the employee at the time of his/her retirement, barring a few exceptions.

Employees State Insurance Corporation or ESIC is a significant social system implemented by Government of India to provide socio-economic security to workers. It ensures that the workers and their families do not suffer in case of any exigencies.

Employers who are registered with PF & ESIC must comply with regular filing with necessary payments against each employee.

Non-payment or delayed payment of employee’s contribution amounts to “Criminal Breach of Trust” as per law and is punishable under IPC Section(s)  406, 409 and also an offence u/s 85 (b-g) of ESI Act. Similarly, employer’s delayed payment is a cognizable offence u/s 14B of EPF Act 1952.

Non-payment, delayed payment or falsifying payments under ESI Act may attract imprisonment for a period extending up to 2 years and a fine of up to Rs 5000.

The employer is liable for prosecution under Section 85(a) for the first time, and if the employer repeats the offence, he will be liable for enhanced punishment for every repetition. The ESI has been established for the benefit and betterment of workers, and the employer must ensure that the purpose is served.

Under section 7Q EPF Act, employers are liable to pay a higher interest rate on the amount due. The rate of damages the employer should pay for the delay in payment of EPF contributions may be up to 25% of the amount if delayed for 6 months or above. Moreover, employers defaulting on paying EPF contribution to their employees are liable to pay the damages for defaulting EPF contributions.

For EPF Filings

• Monthly Contribution: Both the employer and the employee contribute a fixed percentage of the employee’s salary to the PF account. The employer’s contribution is also known as the Employer Provident Fund (EPF) contribution.
• Challan Generation: Employers are required to generate a monthly challan or statement detailing the contributions made by the employer and the employees. This challan is generated through the EPFO (Employees’ Provident Fund Organization) portal.
• Return Filing: Employers need to file their monthly returns on the EPFO portal within a specific due date. The return includes information about the number of employees, their contributions, the employer’s contributions, and other relevant details.
• Payment: Along with the return filing, the employer needs to make the payment for the contributions. The payment can be made online through various modes like internet banking, NEFT, etc.
• Annual Return: In addition to monthly return filing, employers are also required to file an annual return, known as Form 3A and Form 6A. These forms summarize the contributions made throughout the year.

For ESIC Filings:

• Monthly Contribution: Both the employer and the employee contribute a specific percentage of the employee’s wages to the ESIC fund. These contributions provide access to medical benefits and other support.
• Challan Generation: Similar to PF, employers need to generate a monthly ESIC challan through the ESIC portal. This challan contains details of the employer’s and employee’s contributions.
• Return Filing: Employers must file their ESIC return on the ESIC portal, providing information about the number of employees, their wages, and contributions.
• Payment: Alongside return filing, employers are required to make the payment for the contributions within the specified due date. This payment can be done online.
• Half-Yearly Return: In addition to the monthly return filing, employers need to file a half-yearly return known as Form 5. This form provides a summary of the contributions made during the respective half-year periods.

It’s crucial for employers to ensure accurate and timely PF and ESIC return filing to comply with legal requirements and provide employees with the benefits they are entitled to. Non-compliance can lead to penalties and legal repercussions. It’s recommended to consult with legal and financial professionals or use authorized service providers to ensure accurate and timely filing.