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The main objective of this act is to regulate the contract labour and abolish it in certain cases.
Applicability
Every industry engaging 20 or more workers on contract basis.
Every contractor engaging 20 or more workers.
Form XII
Annual return Form XXV (on or before 15th Febconsolidated return) Notice of Commencement/ Form VI B Completion
Obligation of Contractor
Renewal of license Register of workman Employment Card Service Certificate Muster Roll Wages register Wage slip Form VII Form XIII Form XIV Form XV Form XVI Form XVII Form XIX
Contd
Deduction for damage/loss Register of fines Register of advances Register of over-time Half yearly return Notice of Commencement /Completion Form XX Form XXI Form XXII Form XXIII Form XXIV Form VI A
Welfare Facilities
Canteen Rest rooms Urinals, Latrines Drinking Facilities First Aid Facilities Section 16 Section 17 Section 18 Section 19
Principal employer will have to provide these facilities if not provided by contractor. In annual return these facilities needs to be
Contd.
IV) Payment of Bonus Act, 1965 V) Minimum Wages Act, 1948
VI) Payment of Wages Act, 1936
SAP System
Work order is released by concerned deptt. in the SAP system Commercial deptt.release Work order in system
Concerned deptt. Create the indent Indent is created for Labour Supply . Personnel deptt. marks the entry in SAP on the basis of their counting. Overtime of the labour is marked by the concerned deptt.
Payment of Wages
Bills of the contractor of Labour Supply is passed on the basis of the entry in SAP. Payment to the contract labour is disbursed in Contractor Yard. Payment to the contract labour is disbursed before the management representative Representative stamps the register & signs on it.
Introduction
Salary consists of two parts i.e. earnings & deductions Provident Fund is one of the statutory deduction done by the employer at the time of salary payment Provident Fund is governed by the Employees Provident Fund Act 1952
EMPLOYER 12.5%
EMPLOYEE 12%
A/C 1 3.67%
A/C 10 8.33%
A/C 1 1.1%
A/C 21 0.5%
A/C 21 .01%
Account Number
Account Number
1 2 10
Contribution Type
Employees PF EPF Admin Charges
Contribution Rate
12% + 3.67% 1.1%
21
22 TOTAL..
0.01% 25.61%
Compliances.
Annual Returns Employer shall send to the Commissioner within one month of the close of the year, a consolidated Annual Contribution Statement (Form-6A) and individual employee sheet (Form-3A) showing the contributions made by the employees and employer during the year ( PF Year is March to Feb)
List of Forms
Forms For Claiming Benefits Under PF Scheme
Form Purpose
13 For transferring the PF A/c of a member from one establishment (revised) to another establishment covered under the Act / Scheme
14 19 Application for financing a life insurance policy out of PF A/c To be submitted by a member to withdraw his PF dues on leaving service / retirement / termination In the event of death of member, this form is to be used by a nominee / family member to claim the member's PF accumulation For the use of PF members to avail advances / withdrawals as provided in the scheme
25
20
31
List of Forms
Forms For Claiming Benefits Under Pension Scheme
Form
Purpose
10 C
10 D
To be submitted by the first claimant i.e. - member - widow / widower - Orphan - nominee
26
List of Forms
Forms For Claiming Benefits Under EDLI Scheme
Form
Purpose
5 (I.F.)
To be submitted by the person eligible to receive the PF A/c dues of the deceased member who died while in services
27
Summary
Form
2 Nomination Form Return of Employees qualifying for membership to the Employees' Provident Fund for the first time during every month. Within 15 Days of the following month. Return of members leaving service during the month. Consolidated Statement of dues and remittance By 25th of the following month to which the dues relate. Member's annual Contribution card
Purpose
5 10
12A
3A
6A
28
March
Before 15th P.F., P.F. Challan Before 25th P.F Form 5, 10 & 12A(P.F) P.F, P.F. Annual Returns form 6A & 3A
29
Accounting of PF Contribution
Suppose total gross salary payable for the month of January 2010 is Rs. 3,00,000 Out of above, basic salary which is eligible for Provident Fund contribution is Rs. 2,00,000 Hence, the Employee Provident Fund contribution will be calculated @12% of basic salary i.e. Rs. 24,000.00 Net salary payable to Employee is Rs. 3,00,000 Rs.24,000 = Rs. 2,76,000.00 The entry for above transaction will be made accordingly
Journal Entry
Dr. Employer PF Contribution Rs.24,000 Dr. PF administration Fees Rs. 2200 Dr. Employee EDLI Rs. 1,000 Cr. Employers PF payable Rs. 27,200 Now total PF payable will be Rs. 24,000+ Rs. 27,200 =Rs, 51,200 which you should pay to PF department through its challan
ESIC Rates
EMPLOYER 4.75%
EMPLOYEE 1.75%
Kerala State Govt. has declared Minimum Wages for CA office also .. Annexure 2
PROFESSIONAL TAX..
Employer carrying out any business/Profession No limit on No. of Employees (Even employer employing only 1 employee then also he is liable) Due date of payment is 15th of Next Month for Employees share Due date of payment for Employers share is 30th September ( For F.Y.2011-12 due date was 30/09/2011) Salary Register ,Salary Slip, Appointment Letter to be maintained
3
4 5
6000-8999
9000-11999 12000 & Above
80
150 200
Employers Share of PT
Sr.No.
1 2 3
Type of Person
Registered under VAT & T.O. < 250000 Registered under VAT & T.O. > 250000 < 500000 Registered under VAT & T.O. > 500000 < 1000000
Rate (Rs.)
0 500 1250
2400
2000
-:SUMMARY OF REGSITERS & RECORDS TO BE MAINTAINED:Sr.No Act . 1 Factories Act Documents to be maintained
a. b. c. d. e. f. g. a. b. a. b. c. a. Accident Register with Forms Inspection Book Muster Roll & Wage Register Muster Roll for Exempted workers Register of Adult Workers Register of Compensatory holidays & Overtime Register of Leaves with wages Register of Contribution Inspection book Accident Register Register of Contribution Inspection Book Register of Fines, Deduction & Advances
2
3
4 5 6 7 8
Payment of Wages Act,1936 Minimum Wages Act,1948 Payment of bonus Act,1965 Equal Remuneration Act,1976 Contract Labour (R&A) Act,1970
Accountants Role
Maintain Records in good condition ( As there is no provision for how many years books should be maintained) Adhere to Statutory Due dates ( As missing payment due dates will lead to penalty/interest on unpaid amount & will lead to chances of disallowance under Income Tax Provisions) Provide data to consultant well before time Reconcile statutory deductions employee wise & total monthly salary wise. Get salary records audited from PF/ESIC Department once every five years If company has its own PF trust then get trust accounts audited with Chartered Accountant & submit it to PF department( Rotation of CA with every 3 years)
Accountants Role
Dos if company employing Labour Contractor:a. Work Order should be issued to the Contractor ( Before issuing work order copy of all statutory licenses like PF/ESIC should be kept on record) b. Take Copy of Labour License before start working with contract labour
Accountants Role
c. Ensure Attendance register & Salary Register with salary slip of Contract labourer available with the company (Minimum wages to be paid ) d. Take copies of PF/ESIC paid challans from Contractor & preserve them for future departmental Audit ( As a principle employer if contractor does not pay then company will be liable) e. Maintain Labour License Expiry register of all contractor working in the company to avoid legal obligations on organization
Accountants Role
Dos Before Finalization of Accounts at periodic interval:a) Salary as per Financial Statement = salary as per PF/ESIC records b) Match all statutory payments made with financial records c) Ensure Year end outstanding payment is matching with contribution paid in April d) Ensure proper deduction of TDS of employees.
..THANK YOU..