ESIC Registration

Employee State Insurance (ESI) registration is a mandatory compliance requirement for businesses in India, governed by the Employee State Insurance Corporation (ESIC). This scheme provides social security and health insurance benefits to Indian workers earning a specified monthly wage, typically extending to their dependents. Depending on the business type and location, it applies to companies with 10 or more employees.

The ESIC registration process can be completed through online registration on the ESIC website or the Shram Suvidha Portal. Employers must submit following documents, including the company’s PAN Card, Registration Certificate, Certificate of Incorporation, and Address proof of the establishment such as utility bills. Additionally, a cancelled cheque and Partnership deed (if applicable) are also required. The number of employees and their details, like Mobile Number and email ID, must be provided during the process.

After successful ESI Registration, a unique 17-digit code number is issued. This code is essential for future compliance with the scheme, such as making monthly payments and tracking contributions.

Employers are required to pay ESI contributions based on the employee’s monthly wages, with rates set by the ESI Corporation. Contributions must be deposited into a designated bank account within a specific time limit, ensuring that all eligible employees, referred to as Insured Persons, can access the benefits under the scheme. Employers must also maintain proper records of the employees, such as the attendance register, and ensure they file the ESI return within the due dates.

Failure to comply with these regulations can result in penalties under the Factories Act and rules established by the Central Government.

For employees, the ESI scheme offers comprehensive medical benefits at ESIC hospitals and approved medical institutions. The scheme also provides health insurance for employees and their families, covering areas like Occupational Health, maternity leave, and employment injury compensation. Additionally, employees can avail cash benefits during periods of illness or disability.

For businesses, completing ESI Registration is essential to ensure legal compliance, avoid fines, and promote a healthier, more secure workforce. This social security scheme strengthens workplace safety, aligns with regulations from the Government of India, and fosters a positive work environment.

ESIC Registration

ESI Scheme

ESI (Employee State Insurance) operates following the ESI Act of 1948. It is a government scheme designed to provide social security benefits to workers. The administration of this scheme falls under the purview of the Employee State Insurance Corporation (ESIC). Employers must formally register their establishments with ESIC and furnish worker details for inclusion in the program.

Complying with the intricate regulations stipulated by the government can pose a significant challenge for employers. IndiaFilings’ ESI experts are available to assist you with these matters.

ESIC Registration Eligibility

Any non-seasonal factory or establishment having more than 10 employees (in some states it is 20 employees) who have a maximum basic wages/salary of Rs. 21,000 per month (Rs.25,000 per month in the case of persons with disability) are covered under the ESI scheme and thus, they have to mandatorily register with the ESIC within 15 days from the date of its applicability.

Under this scheme, the employer needs to contribute an amount of 3.25% of the total monthly wage payable to the employee whereas the employee needs to contribute only 0.75% of his monthly wage every month of the year. The only exemption to the employee in paying his contribution is whose daily wage is less than Rs.176/- per day.

Who is eligible for ESI Registration?

According to the official notice, the following state government-affiliated entities fall under the scope of the ESI Act according to Section 1(5):

  • Retail outlets
  • Dining establishments or hotels solely involved in sales
  • Movie theatres, including preview facilities
  • Establishments related to road transportation
  • Newspaper organisations (exempt from the Factory Act)
  • Private healthcare facilities
  • Private educational institutions
  • Casual workers employed by Municipal Corporations or Bodies

These entities are required to register with the ESIC if they have a workforce of 10 or more individuals.

Furthermore, the Central Government has expanded the ESI Act’s Section 1(5) coverage to include the following central government-related entities:

  • Retail outlets
  • Hotels and dining establishments
  • Establishments related to road transportation
  • Cinemas, including preview theatres
  • Newspaper organisations
  • Businesses involved in:
  • Insurance
  • Non-Banking Financial Companies (NBFCs)
  • Port trusts
  • Airport authorities
  • Warehousing

Documents Required for ESI Registration

  • Business Registration Proof: One of the following based on the business type:
  • Factories Act Registration Certificate.
  • Shops and Establishment Act Registration Certificate.
  • Establishment Incorporation Certificate, applicable as per the entity type:
  • Company Registration Certificate for companies.
  • Partnership deed for partnership firms.
  • Goods and Services Tax (GST) Registration Certificate of the establishment.
  • CompanyÃ?¢??s Founding Documents:
  • Memorandum of Association (MoA).
  • Articles of Association (AoA).
  • EstablishmentÃ?¢??s Address Proof: One of the following can be provided:
  • Recent utility bill (electricity, gas, or telephone not older than three months).
  • Rental agreement for the establishment’s premises.
  • Property tax receipt for the establishment’s location.
  • Employee Details: A comprehensive list of all employees at the establishment.
  • PAN Cards: PAN details of the business and all employed individuals.
  • Employee Compensation Details: Information on the salary/wages of all employees.
  • Banking Information: A cancelled cheque from the company’s bank account.
  • Company Leadership Details:
  • List of the company’s directors.
  • List of the companyÃ?¢??s shareholders.
  • Employee Attendance Register: Maintaining a record of employee attendance.

ESIC Registration Process Online

  • Visit the ESIC Portal: Go to the official website of the Employees’ State Insurance Corporation (ESIC) and create an account.
  • Fill Out Employer Registration Form: Enter the business details such as name, address, and type of organization.
  • Upload Documents: Submit the required documents as part of the registration process.
  • Review Information: Double-check all the details entered to ensure accuracy.
  • Submit Form: After verifying the details, submit the form for processing.
  • Receive Registration Number: Once the application is approved, you’ll receive a 17-digit unique ESI registration number.
  • Distribute ESI Numbers to Employees: Each employee will be issued an ESI card, which can be used to access ESI benefits.

Compliances After ESIC Registration

After ESI (Employee State Insurance) registration, an establishment must adhere to specific compliances and file requisite ESI returns. These obligations are crucial for ensuring seamless operation and adherence to regulatory standards. The mandatory compliances include:

  • Attendance Register Maintenance: The establishment must diligently maintain an attendance register to record the attendance of all employees. This serves as a fundamental document for compliance and internal record-keeping.
  • Register of Wages: A comprehensive register of wages for workers should be meticulously maintained. This register is vital for transparent documentation of salary details and ensures compliance with ESIC regulations.
  • Inspection Book: An inspection book must be kept to record any inspection on the premises. This facilitates transparency and regulatory compliance during official inspections.
  • Monthly Return and Challan Submission: The establishment must submit monthly returns and challans within the first 15 days of the succeeding month. This includes providing details of employees, their attendance, and the corresponding contributions to the ESIC.
  • Accident Register: A register documenting accidents on the premises is mandatory. Accurate recording of accidents is essential for compliance. It facilitates a proactive approach towards workplace safety.

FAQs

How long does it take to activate ESI?

ESI registration typically takes 7 to 14 days after the submission of all required documents.

What is the limitation of the ESI Act?

The ESI Act primarily covers only certain categories of employees, leaving out higher-paid workers and limiting benefits to those within a specific wage bracket.

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