Overview of ESI Registration
The Employees' State Insurance Act, 1948 was enacted by the legislature as an integrated need based on the social insurance scheme. ESIC stands for Employee State Insurance Corporation which is an autonomous body created by the Ministry of Labor and Employment that governs and regulates the Employee State Insurance in India.
Employee State Insurance is a self-financing social security scheme, initiated for the benefits of the Indian workers by providing them with the necessary benefits such as medical facility, monetary facilities and such other benefits from his employer.
This scheme was started for Indian workers. The workers are provided with a huge variety of medical, monetary and other benefits from the employer. Any non-seasonal factory and company having more than 10 employees (in some states it is 20 employees) who have a maximum salary of Rs. 21,000/- has to mandatorily register itself with the ESIC.
Under this scheme, the employer needs to contribute an amount of 3.25% of the total monthly salary payable to the employee whereas the employer needs to contribute only 0.75% of his monthly salary every month of the year. The only exemption to the employee in paying his contribution is whose salary is less than Rs. 176/- per day.
What are Eligible Entities for ESI Registration?
Following entities employing 10 or more employee are liable to get ESI Registration done:-
What are the Applicability of ESI and Its Coverage?
Above mentioned entities, if employed ten or more employees at any time during the previous year shall mandatory get ESIC Registration. But insurance is deducted for only those employees earning monthly income up to INR 21000 (Basic wages + Dearness Allowance). In a few states, the coverage of ESIC applicability limited to a minimum employee is 20 or more.
ESI scheme provides several benefits to employees covered under ESI with a large network of dispensaries, hospital and medical clinics for providing quick medical care to the insured person. An entity needs to take an ESI registration certificate within 15 days of becoming applicable. However, ESIC regulations are different for different states, and thus, certain rules and provisions vary accordingly.
Book a Free Consultation
Get response within 24 hours
What are the Benefits of ESI Registration
Sickness benefits are provided to the employee at the rate of 70% of his salary in case such sickness continued for exceeding 91 days in a year, and the same is also certified.
Medical benefits are provided to the insured person along with his family members. Full medical care is provided to all persons registered under ESI and their family members – from the day the person enters insurable employment. There is no ceiling on expenditure on the treatment of an Insured Person or his family member. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs.120/-.
Maternity benefits are provided to the women in the form of paid leaves. Maternity benefit for confinement/pregnancy is provided for three months, which is extendable by further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding year.
90% of the salary of the insured person is given to the family of a deceased employee, in case such death occurred while in employment.
Funeral expenses are provided in case of death of any employee covered under ESIC. An amount of Rs.10, 000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment.
Medical care and benefits are provided after retirement or in old age.
Benefits for Permanent Disablement
In case there is any permanent disablement to the insured person, 90% of his salary is provided as a monthly payment in the form of insurance benefit.
An insured person having insurance for more than three years is provided unemployment benefits which become unemployed. Under the Rajiv Gandhi Shramik Kalyan Yojana, unemployment allowance is payable to an insured Person who become unemployed after being insured three or more years, due to closure of factory/establishment, retrenchment or permanent invalidity. The applicable unemployment allowances provided are:
What are the Necessary Papers Required for ESI Registration in India?
Since the procedure for registration is online, no physical necessary papers are required to be submitted. Following necessary papers are required during the online filing of ESI application, which are as follows:-
Following information/details are also required in addition to the above necessary paper-
If any employee is already registered under ESIC:0
If employee is not registered with ESIC
Details of current employer
What is the Registration Procedure of ESI Registration in India?
Log in to ESIC Portal
Employer Registration Form-1
Payment for Registration
Penalty in Failure to get ESI Registration & Returns
In case of any non-compliance by an employer, such as failure to get ESIC employer registration online or not fulfilling ESI return filing procedure, he shall be liable for a fine of INR 10,000/-.
What are the Post-Registration Compliances Under ESI?
Once the entity is covered under ESIC, it needs to comply with mandatory guidelines as issued by the Act:-
What do You Mean by ESI Monthly Contribution?
The scheme of ESI is contributory in nature. Both employee's and employer's contribution is required at a specific rate. Though, rates are amended from time to time. Following is the monthly contribution rate that is contributed mandatorily by both employer and employee:-
Employees who earn up to Rs137 of daily average wage are not entitled to be a part of contribution. However, it is the responsibility of the employer to contribute their own shares in respect of these employees.
Returns Filed Every Year After the Registration is Finalized
After the registration ESI Returns have to be filed twice a year. The following necessary papers are required for the filing of the returns:
CorpBiz Procedure for Payment Bank License
Kindly utilize the steps given above to integrate legally and securely an ESI Registration and get the benefits in the form of better-quality insurance assistance. Our CorpBiz experts will be at your disposal for assisting you with guidance concerning ESI Registration and its compliance for the smooth functioning of your company in India. CorpBiz professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process.
It is advisable that an attorney with "Insurance experience" must be appointed to overwhelm many of the potential pitfalls that creep around within ESI Registration and to understand the requirement in detail. The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided, and the payment is received.
CorpBiz is one of the platforms which coordinate to fulfil all your legal and financial requirements and connect you to consistent professionals. Yes, our clients are pleased with our legal service! Because of our focus on simplifying legal requirements, they have consistently regarded us highly and providing regular updates.
Our clients can also track at all times the progress on our platform. If you have any questions about the ESI Registration process, our experienced representatives are just a phone call away. CorpBiz will ensure that your communication with professionals is charming and seamless.
Frequently Asked Questions
Yes, every entity eligible under the ESIC Act shall get the certificate by registering its entity under ESIC. The applicant can apply online through the official website of ESIC.
Yes, entities once registered under ESIC are required to comply with the provisions of ESIC such as half-yearly return, a deposit of monthly contribution online, maintenance of other books and accounts as required, updating the changes if any relating to business activity, ownership, management, etc.
Once the unit is registered under the ESIC act is allotted 17 digits unique identification number, also known as ESIC Code.
Wages covered under ESIC is the total of Basic Pay plus Dearness Allowances that doesn't include any overtime done by such employee.
If the employer fails to pay the online contribution within 21 days of the end of the month, shall be liable to pay damages at the rate of 12% per annum for each day of such default in contribution.
The ESI Scheme is administered by a corporate body called the 'Employees' State Insurance Corporation' (ESIC), which has members representing Employers, Employees, the Central Government, State Government, Medical Profession and the Parliament. The Director General is the Chief Executive Officer of the Corporation and is also an ex-officio member of the Corporation.
The ESI scheme is a self financing scheme. The ESI funds are primarily built out of contribution from employers and employees payable monthly at a fixed percentage of wages paid.
Employees whose monthly wages are Rs 21,000 or below are covered under the ESI Act. The wage limit for coverage under the Act had been increased from Rs 15,000 per month to Rs 21,000 in December 2016.
ESI is a compulsory for entities employing 10 or more persons, Earlier it was 20 revised to 10. ESI contribution is required for all the employees earning wages less than Rs. 21,000/- per month.
All employees of a covered unit, whose monthly incomes (excluding overtime, bonus, leave encashment) does not exceed Rs. 21,000 per month, are eligible to avail benefits under the Scheme. Employees earning daily average wage up to Rs. 176 are exempted from ESIC contribution.