ESI REGISTRATION IN INDIA

ESI REGISTRATION IN INDIA

A financial social security and health insurance to all the Indian workers, Employees' State Insurance (ESI) scheme was introduced


Overview

It is a scheme which is managed by the Employees' State Insurance Corporation (ESIC) as per the rules and regulations indicated in the ESI Act 1948. ESIC is an autonomous body under the Ministry of Labour and Employment, Government of India. 
 

This scheme was introduced to provide a variety of benefits such as medical, financial benefits and any other benefits as mentioned in the scheme. An organization which has 10 or more employees has to mandatorily register itself with the ESIC.
 

In some states, ESI registration is mandatory when the organization has 20 or more employees.
 

The employer contributes 3.25% and the employee contributes 0.75%, in case where the employee earns Rs. 21,000 or less per month as wages. The ESI fund helps in the medical treatment of the worker and his family too.

All the medical benefit as mentioned in the scheme can be enjoyed by the employee if registration of ESI is done by its employer.

There are various other benefits which the employee can avail as per the scheme of ESI. The ESI registration provides the employee a Long term benefit and a much needed financial security.
 

Benefits of ESI registration
 

Medical benefit: The ESI provides the all the medical benefits as mentioned in its scheme. The scheme not only provides the full medical care to the employee who is insured but it also provides the medical benefits to his  family members, since the day he joins the insurable employment.

This medical benefit is also provided to the retired people and permanently disabled people who are insured and to their spouses only after a payment of a token annual premium of Rs.120.
 

Sickness Benefit: The scheme also provides the benefit in case of  medical leave taken by the employee. Sickness Benefit is paid at the rate of 70 per cent of the wages to the workers who are insured during the periods of medical leave for a maximum of 91 days in a year. The Benefit is given in the form of cash compensation.
 

Maternity Benefit:
In case of leave taken at the time of pregnancy, a Maternity Benefit is payable for Twenty-Six (26) weeks. This benefit can be extended further for one more month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding Two Contribution Periods.
 


 

Disablement benefit: A disablement benefit is also provide to the employees if he/she suffers any injury incurred during the employement period. In case of Temporary disablement, a benefit is provided at the rate of 90% of wage as long as disability continues.

In case of Permanent disablement, a benefit is provided at the rate of 90% of wage for the remaining life of the employee.
 

Funeral Expenses: The Funeral expense of the insured employee is also paid by the ESI. The amount is paid to their dependent or to the person performing last rites.
 

Un-Employment allowance: ESI also provides the allowances to the people who are unemployed for a duration of maximum 24 months as per scheme. 
 

Death Allowance: If the employee dies while being on work, then 90% of his salary is given to his dependents every month after the death of an employee.

The other benefits as provided by the ESI is:

  1. Vocational Training 
  2. Medical care to the old age people. 
  3. A person who becomes unemployed after being insured three or more years, due to closure of factory/establishment, retrenchment or permanent invalidity are entitled to the scheme i.e Rajiv Gandhi Shramik Kalyan Yojana.
  4. Employers' contribution is paid by the Central Government for 3 years.
     

Who are eligible for ESI Registration?

The organization that has 10 or more persons as employee are required to have ESI registration. The organization eligible for ESI registration are as follows:

  • Shops
  • Hotels or restaurants not having any manufacturing activity, but only providing service.
  • Cinemas
  • Newspaper establishments.
  • Roadside Motor Transport Establishments;
  • Private Educational Institutions and Medical Institutions
     


There are some states ESI registration is required only if the organization has for 20 or more employees. Some State Governments have not extended scheme to include Medical & Educational Institutions.
 

Documents Required for ESI Registration

The mandatory documents required for ESI registration are as follows:

A.  From Employers

  • Certificate of Registration or License issued under the Factories Act and Shop and Establishment Act
  • Address Proof that include Rent receipts of the occupied space, further indicating its capacity
  • Copy of latest Bank Statement
  • Copy of PAN Card
  • Memorandum of Association and Articles of Association in case of company
  • Partnership deed/Trust deed depending on the applying entity
  • Copy of Certificate of commencement of production/ Certificate of Incorporation
  • Registration Number of CST/ST/GST
  • Monthly Employment position, salary etc.
  • Contact details such as e-mail id and Mobile number of the firm/company.
     

B.  From Employee

A Copy of Family Photo of employee
 

Process of ESI registration

  • At first the entity/organization have to register themselves within 15 days as soon as the act becomes applicable on them. The entities have to submit an Employer’s Registration Form i.e. Form-01 to the relevant regional office of ESI. Form 03 which is a return on declaration must be submitted along with Form 01.
     
  • After the proper scrutiny of Form 01 and the relevant documents as submitted, if found true and fair, the applicant will receive a 17 digit unique number. This number will be used for all the communication made as per the ESI.
     
  • The employees have to fill a declaration Form (Form1) along with 2 copies of their family photo to the employer at the time of joining the office. The employer will then have to submit this Form to the relevant ESI branch office.
     
  • Then for the purpose of the employee identification under the ESI scheme, an insurance number will be allotted to the employee.
     
  • A temporary identity card will also be issued to the employee for availing the medical benefits for a duration of three months.
     
  • At last a permanent Photo Identity card will be issued to the employee.
     

What are the Post Compliances after the registration?

  • To maintain attendance register
  • To maintain a register of worker’s wages
  • To maintain an inspection book
  • To pay monthly return and challan within 15th of the succeeding month
     

Frequently Asked Questions (FAQ's)
 

Who manages ESI scheme?

ESI scheme is managed by the Employees' State Insurance Corporation (ESIC) as per the rules and regulations indicated in the ESI Act 1948.
 

Is it compulsory to have ESI registration?

Yes, it is compulsory to have ESI registration. An organization which has 10 or more employees has to mandatorily register itself with the ESIC. In some states, ESI registration is mandatory when the organization has 20 or more employees.
 

How much does employer and employee contributes towards ESI?

The employer contributes 3.25% and the employee contributes 0.75%, in case where the employee earns Rs. 21,000 or less per month as wages.
 

What are the benefits of ESI?

The benefits of ESI scheme are:

  • Medical benefits
  • Sickness benefits
  • Funeral expense
  • Unemployed allowance
  • Death Allowance
  • Maternity benefit
  • Disablement benefit
     
Is the Family member of the insured employee also covered under the medical benefit allowed in ESI scheme?

Yes, the Family member of the insured employee is also covered under the medical benefit allowed in ESI scheme.
 

Who are required to do ESI registration?

The organization that has 10 or more persons as employee are required to have ESI registration. The organization eligible for ESI registration are as follows:

  • Shops
  • Hotels or restaurants not having any manufacturing activity, but only providing service.
  • Cinemas
  • Newspaper establishments.
  • Roadside Motor Transport Establishments;
  • Private Educational Institutions and Medical Institutions
     

There are some states where ESI registration is required only if the organization has for 20 or more employees. Some State Governments have not extended scheme to include Medical & Educational Institutions.
 

How many number of employees are required in an organization for ESI registration?

An organization that has 10 or more employees (in some states, it is 20 or more employees) who draw a salary/wages of Rs. 21,000/-, has to mandatorily register itself with the ESIC.
 

What are the returns filed by the filed by the organization after the ESI registration?

The factory or establishment after getting recognized within the ESIC Act, has to file ESI returns two times in a year. The following documents are filed with each return:

  • Register of Wages
  • Employee’s Attendance Register
  • Form 6 Register
  • Returns and Challans of every month
  • A register of any accidents that may have occurred on the premises of the business.
     
What are the due dates for ESI?

The due dates are:

  1. For making Payment: 15th of every month
  2. For filing Returns: May 11th and November 11th

     
EDITED BY MEENU

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