PF & ESIC Inspection

PF (Provident Fund) and ESIC (Employees State Insurance) inspections are conducted by government officers to ensure that establishments are complying with statutory laws, paying contributions correctly, and maintaining employee records.

 . Why Inspections Happen?

  • Random checks by PF/ESIC departments

  • Employee complaints (non-payment or wrong deductions)

  • Delay/default in filing returns or payments

  • During scrutiny of annual returns

  • Surprise inspections by labour authorities

 . PF Inspection (EPFO Officer)

Documents Generally Checked:

  • PF Registration Certificate (Establishment Code)

  • Employee Master List (with DOJ, DOB, Salary, etc.)

  • Attendance & Salary Registers

  • Muster Roll (Employee work records)

  • PF Challans & ECR filed monthly

  • Form 3A & Form 6A (annual PF returns)

  • Bank statement proof of PF payment

  • Contractor details (if contract workers employed)

Focus Points:

  • Correct PF deduction (12% of Basic + DA)

  • Coverage of all eligible employees (₹15,000 and below mandatory, above optional)

  • Timely deposit of employer + employee contributions

  • Accuracy in records vs actual employee strength

 . ESIC Inspection (ESIC Inspector)

Documents Generally Checked:

  • ESIC Registration Certificate (Code Number)

  • List of employees with salary details

  • Attendance & Wage Registers

  • Half-Yearly Returns (Form 5)

  • ESIC Challans (monthly contributions)

  • ESIC cards issued to employees

  • Contractors’ details (if outsourced staff is there)

Focus Points:

  • Deduction of 0.75% (employee) & 3.25% (employer) from gross wages (for salary ≤ ₹21,000)

  • Coverage of all eligible employees

  • Correct calculation of gross salary for ESIC

  • Timely deposit of contributions

 . Penalties if Non-Compliant

  • PF: Damages (up to 25%) + Interest (12% per annum) + possible prosecution

  • ESIC: Interest @ 12% p.a. + penalty up to 25% of dues

  • Risk of legal notice or attachment of bank accounts in severe cases

 . How to Prepare for Inspection

  • Maintain updated & accurate employee records

  • Ensure timely payment & filing of PF/ESIC every month

  • Keep digital + physical copies of challans & returns

  • Cross-check attendance, wages, and deductions

  • Cover contract workers also (liability is on principal employer)

  • Cooperate with the inspector and provide documents on time