Section 21: Contribution

21. Contribution.___(1) Subject to the other provisions of this Chapter, the employer shall, in respect of every employee, whether directly employed by him or through any other person, pay to the Institution a contribution at such rate and subject to such conditions as may be prescribed. (2) Such contribution shall comprise the share payable by the employer (hereinafter referred to as employer's contribution) and the share payable by the employee (hereinafter referred to as employee's contribution) and the rate of such share shall be determined by rules: Provided that the amount of the employee's contribution shall in no case exceed one -third of the whole amount of contribution. (3) The employer shall deduct the amount of employee’s contribution from his wages: Provided that__ (a) the employer shall not deduct the amount of employee's contribution from any wages other than wages for the period to which the contribution relates ; (b) the employer shall not be entitled to deduct from the employee's wages or to otherwise recover from him any portion of the employer's contribution, notwithstanding any agreement to the contrary ; (c) where the whole or part of the wages are not payable by the employer, deductions in respect of employee's contribution shall be made in such manner as may be provided by regulations. (4) Subject to the provisions of sub-section (2) of section 72— (a) no contribution shall be payable on wages in excess of rupees twenty per day ; and (b) no deduction on account of employee's contribution shall be made from wages which are less than rupees two per day. (5) For the purposes of determining the amount of contribution, daily wages shall be calculated in such manner as may be prescribed. (6) Where the mode of payment of remuneration makes it difficult to determine the amount of wages for computing the employee's contribution, the Director-General may, subject to rules and in consultation with the representatives of the employers and the employees, determine and fix such wages and may also for that purpose determine classes and categories of employees. (7) Any sum deducted from an insured person's wages by the employer under this Ordinance shall be deemed to have been entrusted to him for the purpose of paying the insured person's share of the contribution in respect of which it was paid. (8) In the case of construction work the owner of the building shall guarantee the payment of contributions by the contractor. (9) In the case of works executed or undertakings carried on behalf of the State by a contractor or licensee, the competent public authority shall, before final settlement of the claims of the contractor or licensee arising out of the contract, require the production of a certificate from the Institution showing that the necessary contribution have been paid and in default of such certificate, it shall deduct the appropriate amount of contribution payable and pay it direct to the Institution.

Effective date: 1962-01-01

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