Applicability of EPF:
- The EPF Act is applicable to establishments employing 20 or more persons, including contract workers directly employed by the principal employer.
- If contract workers are employed by a contractor, the principal employer is still responsible for ensuring EPF contributions are made.
- The principal employer can recover any unpaid EPF contributions from the contractor by deducting them from amounts owed to the contractor.
- 12% of monthly salary is employers (subject to a maximum of Rs 1,800)
Employee Pension Scheme (EPS) 8.33% (of the 12%) by employer
Employee Provident Fund (EPF) 3.67% (of the 12%) by employee
Applicability of ESI:
- The ESI scheme is applicable to all factories and establishments employing 10 or more persons, including contract workers employed on the premises of the principal employer.
- The ESI scheme covers employees with monthly wages not exceeding Rs. 21,000.
- The employer contributes a portion (3.25%) of the wages to the ESI fund, and the employee contributes another portion (0.75%).
cost impact on the cost towards pf and esi will be 3.3 ~ 3.5% of the estimate/ contract value of work
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