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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:-

  • Newspaper Establishment
  • Private Education Institues
  • Establishments engaged in Motor Transportation
  • Cinemas
  • Restaurants and Hotels
  • Shops

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.

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What are the Benefits of ESI Registration

  • Unemployment Benefits
  • Medical Benefits
  • Maternity Benefits
  • Deceased Employee
  • Funeral Expenses
  • Retirement Benefits
  • Benefits for Permanent Disablement
  • Sickness Benefits

Sickness Benefits

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

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

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.

Deceased Employee

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

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.

Retirement Benefits

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.

Unemployment Benefits

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:

  • Unemployment Allowance equal to 50% of wage for a maximum period of upto one year.
  • Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives unemployment allowance.
  • Vocational Training provided for upgrading skills – Expenditure on fee/travelling allowance borne by ESIC.

What are the Documents Required for ESI Registration in India?

Since the procedure for registration is online, no physical Documents are required to be submitted. Following Documents are required during the online filing of ESI application, which are as follows:-

  • A registration certificate obtained either under the:-

    Factories Act, or

    Shops and Establishment Act

  • Certificate of Registration in case of Company, and Partnership deed in case of a Partnership,
  • Copy of Bank Statement
  • Copy of License issued in the Name of Establishment
  • Memorandum of Association and Articles of Association of the Company
  • A list of all the employees working in the Establishment
  • Copy of Electricity Bill
  • Copy of Rent/Lease Agreement
  • PAN Card of the Business Entity as well as all the Employees working under the entity
  • Copy of Board Resolution
  • The compensation details of all the employees
  • A cancelled cheque of the Bank Account of the Company
  • List of Directors of the Company
  • List of the Shareholders of the Company
  • A register containing the attendance of the employees

Following information/details are also required in addition to the above Document-

If any employee is already registered under ESIC:0

  • Employee Insurance Number
  • Date of Appointment

If employee is not registered with ESIC

  • Name of employee
  • Name of employee's father/husband
  • Address
  • Date of Birth
  • Date of appointment
  • Details of nominees (name, address, mobile no, email id, relationship details etc.)
  • Bank Account Details (Account number, Branch name, bank name, IFSC code etc.)
  • Employer code no.
  • Details of the previous employer
  • Name of employer
  • Employer Insurance no.
  • Contact no of employer
  • Address of employer

Details of current employer

  • Employer code no.
  • Employer Insurance number
  • Name of employer
  • Address of employer
  • Contact no of employee

What is the Registration Procedure of ESI Registration in India?

Log in to ESIC Portal

  • An employer requires getting himself registered on the ESIC portal.
  • An employer can register by clicking on the "Sign Up" button on the ESIC portal under the Employer Login-option on the home screen.
  • The employers need to fill in the details after clicking on the "Sign up" button, and submit the form.
registered on the ESIC portal

Confirmation Mail

  • After submitting the form for sign up to the portal the employer will obtain a confirmation mail sent, to the registered mail ID & mobile number entered at the time of sign-up.
  • For registering as an employer & employee under the ESIC scheme the email will contain the username & password details.
employee under the ESIC scheme

Employer Registration Form-1

  • Next, along with the username and password received in the mail, log in to the ESIC portal. This will pass on to the page having the option of "Tab - New Employer Registration". Click It. New Employer Registration
  • Next, from the drop-down list select the 'Type of Unit' and click on the 'Submit' button. The 'Employer Registration - Form 1' will come out & the employer requires filling in the details. employer requires filling
  • The Employer Registration Form-1 concedes details pertaining to the unit of the employer, details of the employer and employees. He needs to click on the 'Submit' button, once; the complete form is filled by the employer. Employer Registration Form-1 Employer Registration

Payment for Registration

  • The 'Payment of Advance Contribution' page will open after submission of the Employer Registration Form-1, where the employer requires filling the amount to be paid & select the payment mode. The employer will need to pay the advance contribution for 6 months.

Registration Letter

  • The system generated Registration Letter (C-11) is sent to the employer on the successful payment of six months advance contribution, which will contain a 17 digit Registration Number by the ESIC department.
  • The Registration Letter (C-11) is a valid proof of registration of the employer.

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:-

  • 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.

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:-

  • 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 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 Documents are required for the filing of the returns:

  • Register of attendance of the employees.
  • Form 6 - Register.
  • Register of wages.
  • Register of any accidents which have happened on the premises of the business.
  • Monthly returns and challans.

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.

Why CorpBiz?

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.

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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.

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