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 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.
ESI is managed and governed by the rules and provisions issued by the ESIC Act 1948.
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
- Maternity benefits are provided to the women in the form of paid leaves
- 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
- Medical care and benefits are provided after retirement or in old age.
- 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. Such allowances are provided at the rate of 50% of the salary for one year
Documents Required for ESI Registration in India
Following documents are required during the online filing of application:
- Any registration certificate or License issued under Shops & Establishment Act
- MOA & AOA in case an applicant is Company
- Partnership deed if the applicant is a partnership firm
- LLP Agreement in case of Limited Liability Partnership
- Registration certificate for other entities and certificate of commencement of production of factories.
- PAN of the business
- PAN and Aadhar of employees
- Nominee details of the insured person
- Bank statement of the organization
Eligible Entities for ESI Registration
Following entities employing ten or more employee are liable to get ESI registration done:
Applicability of ESI and Its Coverage
Above mentioned entities, if employed ten or more employees at any time during the previous year shall mandatory take 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.
Registration Procedure of ESI Registration in India
- Apply online through new registration option available on the official website of ESIC esic.in
- The applicant can sign up by creating user-id and password, which can be used further for return filing or other similar activities.
- A confirmation mail is sent via registered mail id and mobile number entered at the time of sign up.
- Login using the same user-id and password for completion of application form online.
- Complete all the details of the application and the one marked with Asterisk (*) is compulsorily provided.
- After the application is completed, finally submit it by paying online the prescribed advance contribution of six succeeding months.
- The registration certificate is allotted with a 17 digit registration number by ESIC department once the application is completed.
Once the entity is covered under ESIC, it needs to comply with mandatory guidelines as issued by the Act:
- Maintenance of attendance register
- A complete register of wages for workers
- Inspection book
- Monthly return & challan within 15th of succeeding month
- The register maintained to record any accidents that happened on the premises.
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:
- Employee: Employee has to contribute 0.75% of his basic wages to the ESI Fund
- Employer: Employer has to contribute 3.25% of the basic wage paid to employees.
Employees who earn upto 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.
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.