Employees’ Old-Age Benefits Act
🧾 Employees’ Old-Age
Benefits Act, 1976 – Part I
For Business & HRM Students
Purpose: To provide financial security to employees in old age,
retirement, disability, or upon death through pensions and benefits.
8.1 Employees’ Old-Age Benefits Contribution Rules, 1978
Definition:
These rules govern the payment, collection, and
management of contributions made by employers and employees to the EOBI
fund.
Key Features:
- Employer
contributes 5% of minimum wage
- Employee
contributes 1% of minimum wage
- Payments
are made monthly to EOBI fund
Example:
If minimum wage is Rs. 32,000/month, employer contributes
Rs. 1,600, and employee contributes Rs. 320.
Business Advantage:
- Enhances
employee retention
- Demonstrates
corporate social responsibility
8.2 Employees’ Old-Age Benefits
Types of Benefits:
- Old-Age
Pension (on retirement at 60 years for men, 55 for women)
- Invalidity
Pension (due to permanent disability)
- Survivor’s
Pension (paid to legal heirs upon worker’s death)
- Old-Age
Grant (if minimum contribution years not fulfilled)
Conditions:
- Minimum
15 years of contribution for pension
- At
least 3 years for survivor pension
Example:
A retired textile worker with 16 years of contribution
receives Rs. 8,500/month as a pension.
Advantages:
- Financial
safety net for employees
- Reduces
burden on family and society
8.3 Employees’ Old-Age Benefits General Regulations, 1980
Purpose:
These regulations provide administrative procedures
for:
- Benefit
claims
- Maintaining
employee records
- Issuing
EOBI cards
Example:
An employee files a claim online using their EOBI
registration number and NIC.
Note:
Employees must keep their data updated with the employer and
EOBI system.
8.4 Insured Persons, Board of Trustees, Powers,
Functions, and Terms of Office
Insured Person:
Any worker registered under EOBI and contributing is an
“insured person”.
Board of Trustees:
Governing body managing the EOBI fund.
Powers & Functions:
- Manage
funds
- Approve
policies
- Oversee
pension schemes
Terms:
- Members
are appointed by the government
- Typically
serve a fixed term (e.g., 3 years)
Example:
The Board approves increase in pension disbursement rates
based on inflation index.
8.5 Determination of Wages for Computation of
Contribution Regulation, 1980
Objective:
To determine what is included in “wages” for calculating
EOBI contributions.
Inclusions:
- Basic
salary
- Allowances
(excluding bonuses, overtime)
Example:
If an employee earns Rs. 35,000 basic + Rs. 3,000 allowance,
the wage for EOBI = Rs. 38,000.
Impact:
Prevents under-reporting of wages and ensures fair
contributions.
8.6 Determination of Complaints, Questions, and Disputes
Regulations, 1980
Purpose:
Provides a legal process for resolving disputes between:
- Employee
& employer
- Employer
& EOBI
- Employee
& EOBI
Process:
- File
complaint to EOBI Adjudicating Authority
- Right
to appeal
- Binding
decision enforced by labor courts
Example:
An employee disputes that his employer did not deposit his
contributions—he files a case through EOBI complaint system.
Benefit:
Ensures transparency and justice in implementation.
📊 Business & HRM
Relevance
|
Area |
Advantage for Business Students |
|
HR Compliance |
Understand legal obligations for employee pensions |
|
Payroll Management |
Accurate wage calculations and contribution deductions |
|
Corporate Governance |
Learn about social insurance and state-led benefit schemes |
|
Legal Risk Mitigation |
Avoid legal disputes by ensuring timely EOBI payments |
|
Employee Satisfaction |
Attract and retain talent by offering legal retirement
security |
✅ Conclusion
The EOBI Act ensures financial dignity for workers post-retirement and benefits families in the case of disability or death. For business students, especially in HR and payroll roles, knowledge of these laws is vital for maintaining ethical and legal workplace practices.
