ESIC Registration – What is ESIC?

Employee State Insurance (ESI) is a social welfare and self-financing scheme that benefits workforce by offering them with various health benefits. The ESI scheme benefits both employees and their families. The benefits offered by the ESI scheme include disability payments, disability benefits, medical benefits, compensation of hospital bills and a number of other benefits. However, in order to benefit from the benefits of the ESI scheme, an employer with more than 10 employees (in some countries the prescribed limit is extended to 20 employees) who earn a top income of Rs 15,000 p.m. is needed to receive ESI Registration.

The Employee State Insurance (ESI) Act of 1948 is the law governing the ESI scheme. The ESI scheme is therefore governed by and regulated by the provisions of the ESIC Act, 1948. The Employees ’ State insurance Corporation or ESIC is an independent institution formulated by the Ministry of Labor and Employment. In India, all activities relating to the ESI scheme are regulated by this independent body.

What is an ESI Scheme?

The term ESI Scheme defined as a social security scheme designed to provide social protection for workers working in the industry. Social sustainability refers to the protection offered against uncertain occurrences of maternity, sickness, disability and death due to any injury caused in the course of employment. The scheme also aims at providing medical care facilities to both insured employees and their family members (dependents).

What is ESI Registration?

ESI Registration is required for employers with a workers of more than 10 employees and a maximum salary of Rs 15000 p.m. By acquiring ESI Registration, a number of monetary, medical and other benefits for workers or employees collaborating are paid by the company.

Once the organisation has been registered under the ESIC Act, the employer is now required to contribute an equivalent amount to 44% of the maximum monthly salary paid to workers. On the other side, each employee issues and concerns is required to contribute only 01 per cent of each month's salary. However, employees earning less than Rs 100 per day are exempt from making a contribution.

What is the Monthly ESI Contribution?

The monthly contribution from the ESI shall be reduced with effect from 15.02.2020. Earlier, the employer was expected to contribute an amount equal to 4.75 per cent of the employee's salary. Whereas the employee was required to make a contribution of 1,75 per cent of his salary.

However, these limits are now being reduced. The employee is now required to contribute 01 per cent of the salary, rounded off to the next higher rupee. On the other hand, the employer is asked to contribute 44% of the wages payable to each employee, rounded off to the next higher rupee.

What is an ESIC Code Number?

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

What are the Benefits of ESI Registration?

The following listed are benefits of ESI Registration:

1. It provides comprehensive medical benefits.
2. It includes dependants.
3. ESI Registration can be used easily at different ESI hospitals and dispensaries.
4. Any payments made will be compensated or reimbursed.
5. It also takes into account the needs of the disabled.
6. It provides easy access to the medical care in ESI Dispensaries or Hospitals.
7. 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.
8. Maternity benefits are given in the form of paid leaves.
9. Ninety percent of the total salary of the insured person is given to his dependents in case of his death during employment.
10. Funeral expenses are provided to the deceased’s family.
11. 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 ESI Registration?

The entities which are required to obtain ESIC Registration are as follows:

1. Shops,
2. Hotels, or the Restaurants which are not having any manufacturing activity, but are engaged in providing service,
3. Cinemas,
4. Establishment engaged in Roadside Motor Transports,
5. Newspaper Establishments,
6. Private Medical or Educational Institutions,

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:

3. Managing Agent of the Occupier or Owner.
4. Legal Representatives of theDeceased Occupier or Owner.
5. Factory Manager.
6. If the establishments belonging to the Government of India.

However, in the case of any government department, the head of that department will be considered to be the main employer. And, in all other establishments, the principal employer is the person responsible of supervision and control.

Immediate Employer as per the ESI Act

Immediate Employer may be one of the following:

(a) One who carries out or completes any work within the main employer's factory;

(b) the person who performs or performs any work outside the premises supervised and managed by the principal employer;

(c) one who provides on-site services to the principal employer of the factory or establishment of his employees;

(d) The contractor

Employee according to the ESI Act

All employees working in an ESI registered unit whose monthly income (excluding bonuses, overtime and leave payments) does not exceed the threshold of Rs 15,000 per month are eligible for benefits and privileges granted under the scheme. However, employees earning an average daily wage of up to Rs 100 are exempt from the ESIC contribution.

Those who are not considered to be employees are as follows:

(a) Apprentice,

(b) any employee who has a salary of more than Rs 15000,

(c) Any member of the Indian Armed Forces.

Requirements for obtaining ESIC Registration

The listed below are the requirements that are to be fulfilled for obtaining ESIC Registration:

1. The employer must be employing more than ten employees in his establishments (for some states the prescribed limit is extended to twenty employees),
2. The employees must be earning a maximum salary of Rs 15000 per month,
3. The term “wages” includesBasic 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 Allowanceand Incentive Bonus.

What are the Documents Needed for obtaining ESI Registration?

The documents needed for obtaining ESI Registration are as follows:

1. Form 01: For Employer's Registration
2. List of a minimum ten or twenty employees along with their date of joining and Salary Rate
3. Memorandum of Association {MOA}
4. Article of Association {AOA} together with the Certificate of Incorporation or the Partnership Deed as applicable.
5. Copy of the PAN (Permanent Account Number) Card details of the business
6. A copy of the Bank Statements of the concerned business
7. GST (Goods and Service Tax) Registration
8. Copy of the Factory or the Shop and Establishment Registration
9. A copy of an LLP Agreement in the case of a Limited Liability Partnership
10. Declaration Form from each employee together with their two passport-sized photographs
11. PAN and Aadhar of employees
12. Nominee details of the insured person

Process of Obtaining ESIC Registration

The steps involved in the ESIC Registration procedure are listed below:

(a) Visit the Official Site: In order to apply for ESIC registration, the applicant must visit the official website of ESIC, i.e. www.esic.in.

(b) Login Credibility: The applicant can register by making his own password and username. These login details may also be used for the purpose of filing a return or other similar activity.

1. c) Confirmation Mail: In the next step, a confirmation mail will be sent to the registered e-mail ID of the applicant as well as to the registered mobile number
2. d) Enter the Login Details: Now, the applicant is required to login into his account by using the already provided username and password.
3. 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.
4. 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
5. 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 theESIC Code,which is17-digit Unique Identification Number.

Post-Registration Compliances

Once the establishment or factory has been registered under the provisions of the ESI Act, the establishment must comply with some of the mandatory guidelines laid down in the Act:

(a) Maintenance of the attendance register;

(b) a complete register containing details of the salaries paid to the workers;

1. c) Book of inspections,
2. d) Monthly return and call by the 15th of the following month;

(e) Maintenance of a register containing the records of accidents at the premises.

Importance Answers that Every Individual Must Know

How can an individual be registered for the ESI?

In order to register an employee under the ESI scheme, the employee concerned must provide the employer with a completed form and photographs of his family member (registered under ESIC). After that, he will receive an ESI (Employee State Insurance) card after registration.

How much staff strength is needed for ESIC Registration?

A company employing more than 10 employees (for some states, 20 employees) with a maximum salary of Rs 15,000 is required to register with the ESIC.

Is ESI Registration mandatory?

Yes, every company employing strength of more than ten people is required to obtain ESI Registration.

Documents needed for obtaining ESI Registration

The documents needed for obtaining ESI Registration are as follows:

1. Form 01: For Employer's Registration
2. List of a minimum ten or twenty employees along with their date of joining and Salary Rate.
3. Memorandum of Association {MOA}.
4. Article of Association {AOA} together with the Certificate of Incorporation or the Partnership Deed as applicable.
5. Copy of the PAN (Permanent Account Number) Card details of the business.
6. A copy of the Bank Statements of the concerned business.
7. GST (Goods and Service Tax) Registration.
8. Copy of the Factory or the Shop and Establishment Registration.
9. A copy of an LLP Agreement in the case of a Limited Liability Partnership.
10. Declaration Form from each employee together with their two passport-sized photographs.
11. PAN and Aadhar of employees.
12. Nominee details of the insured person.

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