Provident Fund (EPF) and Employees’ State Insurance (ESIC) are statutory benefits your contract workers are entitled to. If the contractor defaults, the principal employer can be made to pay — so it pays to understand the basics.
Provident Fund (EPF)
- Employee contributes 12% of basic + DA; the employer contributes a matching 12% (a portion of which goes to the pension scheme).
- Coverage is mandatory up to a wage ceiling (currently ₹15,000 of basic + DA), and each worker needs a UAN.
- Contributions are filed monthly through an ECR, with a challan paid before the due date.
ESIC
- Employee contributes 0.75% and the employer 3.25% of gross wages.
- Applies to workers earning up to ₹21,000 per month; each needs an IP number.
- It funds medical care and cash benefits for the worker and dependants — and is the first thing checked after a workplace accident.
What a principal employer should verify
- Every eligible worker has a UAN and ESIC IP number.
- Challans are actually paid each month — not just calculated.
- You receive the challans and ECR as proof, every cycle.
How VedhanHR keeps it clean
PF and ESIC are computed automatically from locked attendance, the ECR is generated from payroll, and the paid challans flow straight into your monthly compliance pack — so your liability is covered with evidence, not assurances.