Overview of ESIC Registration

The Employee State Insurance (ESI) is a social security and self-financing scheme which benefits the employees by providing them with various health benefits. ESI Scheme gives benefits to both employees and their families. The benefits provided by the ESI scheme include sickness benefit, disablement benefits, medical benefit, reimbursement of the funeral expenses, and several other benefits. However, to benefit from the ESI scheme's benefits, the employer who has the employees count of more than ten employees (in some states the prescribed limit is extended to twenty employees) who are earning a maximum salary of Rs 15,000 p.m., are required to obtain ESI Registration.
The Employee State Insurance (ESI) Act of 1948 works as the governing law for the ESI scheme. Hence, the ESI scheme is governed and regulated by the provisions of the ESIC Act, 1948.The Employee State Insurance Corporation or ESIC is an autonomous body formulated by the Ministry of Labour and Employment. In India, all the activities concerning to ESI scheme are regulated by this independent body.

What is an ESI Scheme?

The term ESI Scheme refers to a social security scheme designed to provide social protection to the employees working in the organized sector. Social protection refers to protection provided against the uncertain events of maternity, sickness, disablement, and death due to any injury caused in the course of employment. This scheme also focuses on providing medical care facilities to both insured employees and their family members (dependents).

What is ESI Registration?

ESI Registration is mandatory for those employers who are having employee strength of more than ten employees and are earning a maximum salary of Rs 15000 p.m. By obtaining ESI Registration, the workers or the employees working are provided with several monetary, medical, and other benefits by the employer.
After getting the establishment registered under the ESIC Act, the employer is now required to contribute an amount equivalent to 04 percent of the total monthly salary paid to the employee. In contrast, each concerned employee is required to contribute only 01 percent of each month’s salary. However, the employees who are earning less than Rs 100 per day are exempted from making a contribution.

What is the Monthly ESI Contribution?

With effect from 15.02.2020, the monthly ESI contribution is reduced. Earlier, the employer was supposed to contribute an amount equal to 4.75 percent of the employee’s salary. Whereas, the employee was required to contribute 1.75 percent of his salary.
However, the said limits are now reduced. The employee is now required to contribute 01 percent of the wages, rounded off to next higher rupee. In contrast, the employer is asked to contribute 04 percent of the wages payable to every employee, rounded off to next higher rupee.

What is an ESIC Code Number?

ESIC Code is a 17-digit unique identification number issued to every registered establishment. This code is generated either when the employer submits the required information on the ESIC Portal or on the receipt of a survey report from the Social Security Officer.

Benefits of ESIC Registration in India

The following listed are benefits of ESIC Registration:
It provides comprehensive medical benefits.
It includes dependants.
ESI Registration can be used easily at different ESI hospitals and dispensaries.
Any payments made will be compensated or reimbursed.
It also takes into account the needs of the disabled.
It provides easy access to the medical care in ESI Dispensaries or Hospitals.
Sickness benefits are offered at the rate of 70 percent of the employee’s salary. The same is provided if the sickness continued for more than ninety-one days in a year.
Maternity benefits are given in the form of paid leaves.
Ninety percent of the total salary of the insured person is given to his dependents in case of his death during employment. Funeral expenses are provided to the deceased’s family.
In the Permanent Disablement case, 90 percent of the insured’s monthly salary is offered as an insurance benefit.

Who are all Eligible to obtain ESIC Registration?

The entities which are required to obtain ESIC Registration are as follows:
Shops,
Hotels, or the Restaurants which are not having any manufacturing activity, but are engaged in providing service,
Cinemas,
Establishment engaged in Roadside Motor Transports,
Newspaper Establishments,
Private Medical or Educational Institutions,

Who is a Principal Employer as per the ESI Act?

A principal employer is usually the occupier or the owner of the factory to which the ESI Act applies. In the case of a Factory, either of the listed below can be considered as Principal Employer:
Occupier.
Owner.
Managing Agent of the Occupier or Owner.
Legal Representatives of the Deceased Occupier or Owner.
Factory Manager.
If the establishments belonging to the Government of India.
However, in the case of any government-owned department, the head of the said department will be considered as the Principal Employer. And, in all the other establishments, the person-in-charge of the Supervision and Control is called the Principal Employer.

Who is an Immediate Employer as per the ESI Act?

Immediate Employer can be either of those mentioned below:
One who executes or completes any work inside the factory of the Principal Employer.
One who executes or completes any work outside the premises supervised and managed by the principal employer.
One who provides the on-hire services of his employees to the principal employer of a factory or establishment.
A Contractor

Who is an Employee according to the ESI Act?

All employees working in an ESI registered unit, whose monthly incomes (excluding the bonus, overtime, and leave encashment) do not exceed the threshold of Rs 15,000 per month, are eligible for the benefits and privileges provided under the Scheme. However, the employees who earn daily average wages up to Rs 100 are exempted from the ESIC contribution. The ones who are not considered as an employee are as follows: An Apprentice Any employee who is earning a salary of more than Rs 15000. Any member of the Indian Armed Forces.

Minimum Requirements for obtaining ESIC Registration

The listed below are the requirements that are to be fulfilled for obtaining ESIC Registration:
The employer must be employing more than ten employees in his establishments (for some states the prescribed limit is extended to twenty employees).
The employees must be earning a maximum salary of Rs 15000 per month.1410100028 The term “wages” includes Basic Pay, City Compensatory Allowance (CCA), Dearness Allowance (DA), and Payment of the Day of Rest, Overtime Wages, Attendance Bonus, House Rent Allowance (HRA), Incentive Allowance, Meal Allowance and Incentive Bonus.

Documents Required for ESIC Registration

The documents needed for obtaining ESI Registration are as follows:
Form 01: For Employer's Registration.
List of a minimum ten or twenty employees along with their date of joining and Salary Rate.
Memorandum of Association {MOA}
Article of Association {AOA} together with the Certificate of Incorporation or the Partnership Deed as applicable.
Copy of the PAN (Permanent Account Number) Card details of the business.
A copy of the Bank Statements of the concerned business.
GST Registration
Copy of the Factory or the Shop and Establishment Registration.
A copy of an LLP Agreement in the case of a Limited Liability Partnership.
Declaration Form from each employee together with their two passport-sized photographs.
PAN and Aadhar of employees.
Nominee details of the insured person.

Procedure for ESIC Registration

The steps involved in the procedure for obtaining ESIC Registration are enumerated below:
Visit the Official Website
For applying ESIC registration, the applicant is required to visit the official ESIC website.
Login Credentials
The said applicant can sign up by making his own password and username. These login credentials can further be used for the purpose of filing return, or doing other similar nature activities.
Confirmation Mail
Now, in the next step, a confirmation mail will be sent to the applicant’s registered E-mail ID and also on the registered mobile number.
Enter the Login Details
Now, the applicant is required to login into his account by using the already provided username and password.
Fill in the Application Form
In the fifth step, the applicant is asked to complete all the necessary details of the application form. Moreover, it shall be taken into consideration that the columns marked with Asterisk (*) are to be filed compulsorily.
Payment of Fees
Once the application form is duly completed by the applicant, he or she is required to finally submit it by paying the prescribed fee. The fee prescribed is paid on online and the same act as an advance contribution for the coming six months.
Issuance of the ESIC Code Number
In the last step, the authorities, after verifying all the details and the documents submitted, will issue a registration certificate to the applicant. The authority having the power to issue the certificate of registration is the Employee State Insurance Corporation. This registration certificate also contains the ESIC Code, which is17-digit Unique Identification Number.

Post-Registration Compliances under the ESI Act

Once an establishment or a factory is registered under the provisions of the ESI Act, the said establishment is then required to comply with some of the mandatory guidelines prescribed by the Act:
Maintenance of an attendance register.
A complete register having the details of the wages paid to the workers.
Inspection book
Monthly return and challan by the 15th of the following month.
Maintenance of a register having a record of the accidents took place on the premises.

₹ 4,999/ Original ₹ 9,999 (50.01% OFF)