What is ESI Registration?

The Employees' State Insurance Act, 1948 was enacted by the legislature as an integrated need based on the social insurance scheme. It was enacted with a purpose to protect the life of workers in sickness, pregnancy or any kind of accident, temporary or permanent physical disablement, or in case of death due to employment injury which results in loss of salary or earning capacity of an individual.

ESI or Employee State Insurance is a scheme under The Employees' State Insurance Act, 1948 provided by the Indian Government to offer medical, monetary and other similar advantages to workers. ESI is regulated and governed under the autonomous authority, namely the Employee State Insurance Corporation commonly abbreviated as ESIC. The jurisdiction of ESIC lies under the Ministry of Labor and Employment.

Furthermore, under the ESIC Act, every company having the employee strength of 10 people mandatorily has to obtain ESI. However, this limit is set to 20 people/ employees in some states of our country.

The ESIC Act also provides reasonably good medical care to the workers and their immediate dependents. Online ESIC registration is compulsory for entities employing, employees earning Rs. 21,000 per month or less as wages or salary.

ESI is a type of a self-financing social security scheme in India. Previously, ESIC was only applicable in factories where 10 or more people were employed. Later on, the ESI scheme expanded and the rules were changed. Now, any business establishment where 20 or more persons are employed and drawing wages up to Rs.21,000 per month has to mandatorily attain the ESIC registration.

Furthermore, the employer needs to contribute 4.75 %, and the employee needs to add 1.75% a total share of 6.5% of the Gross salary under the ESIC Act. This fund is supervised by the ESI Corporation incorporated under the ESI Act. The entity owner has to mandatory register under ESI Scheme within 15 days from the date of incorporation. The ESI Corporation oversees the provisions of medical and cash benefits of the ESI Cardholder and the dependent family members. Now ESI Corporation has set- up a vast network of Regional offices, dispensaries, and hospitals all over the main cities in India. The state government is responsible for the administration and supervision of the hospitals. ESIC Registration process is completely an online process, and we can do this on your behalf.

Benefits of ESI Registration

Under the ESI Act, all employees of a company holding ESI Registration are provided with the following advantages:

Medical Advantages:

Every registered person and his family get complete medical care.

Advantages in case of Sickness:
70% of the salary is payable for a maximum of 81 days in a year in case of certified sicknesses.
Furthermore, in the case of long-term disease, 80% of the salary is payable for a period of 2 years.
Maternity Benefits

3 months of maternity benefits are provided to a pregnant woman working in an entity. Also, this period can be extended up to 30 days in case it is medically advised.

Disablement Compensation
90% of the wage is payable by the employer if the worker is permanently disabled.
Additionally, in case of death within the premises of the employment area, then the dependents of the deceased person are paid 90% of the salary every month.

Furthermore, ESI not only grants access to good medical care at all ESI hospitals but it also provides medical reimbursement. Furthermore, under the Rajiv Gandhi Sharmik Yojana, a worker who has been insured for 3 or more years is applicable for the unemployment allowance.

Entities that need ESI Registration

The following are the type of entities that has to obtain ESI Registration as per the Employees' State Insurance Act, 1948;

Shops
Cinemas
Newspaper Establishments
Hotels or restaurants providing services and not carrying out any manufacturing activities
Medical Institutions
Educational Institutions (Private)
Roadside Motor Transport Establishments

What is the significance of ESIC Registration in India?

ESIC Registration is mandatory for all employers providing a salary of INR 21,000 per month or less employing over 10 people which is set to 20 people in some states.

ESI Registration Benefits to Employees

ESI provides social insurance to protect the life of workers in sickness or any accident, injury which can result in loss of salary or earning capacity of a human being.

ESI Registration Benefits to Employers

A Registered organization under the ESI Act, secures legal liability which can arise from an accident at the workplace or outside the workplace. If an employer is registered under the act, then total expenses in case of disability or sickness of the employee shall be taken care of by the ESI Corporation.

ESI Payment

ESI Contributions should be paid on the government account before the 21st of the given month.

ESIC Registration Process in India

Application drafting

We will draft the ESI Application on your behalf along with the list of employee's pre-registration.

Processing the application

After submission of the application for ESI Establishment code, the concerned Regional Office will approve a unique employer code and may also request for more information from the employer.

ESI Registration Process duration

Online ESI Registration process takes about 10 to 15 working days, subject to the Government processing time.

Documents Required for ESI Registration in India?

Form 01: - Employer's Registration (may be abstained from ESI Office)
List of minimum 10 or 20 Employees with their DOJs and Rate of Salary
Memorandum of Association {MOA}
Article of Association {AOA} along with Certificate of Incorporation/ Partnership Deed as applicable
Copy of the PAN Card
A copy of the Bank Statements
GST Registration
Copy of Factory/ Shop & Comm. EST Registration
A copy of any other Registration as required
Declaration Form from each employee along with their 2 Postcard sized photographs (this step is optional)

Steps Covered Under ESIC Registration Process?

The following procedures are involved in the issuance of your ESI Registration;

ESI Registration Application filing

A business entity within 15 days of the Act becomes applicable to obtain ESIC Registration. Establishments or Factories, need to file an application and submit it in the Employer's Registration Form (Form-01) to the relevant Regional Office.

Code Number

A 17-digit identification number known as the Code number is provided. Along with Form 1, Return on Declaration in Form 3 is required to be submitted by the business entity.

For Employees

Employees are required to fill Form 1, and two copies of the family photo also need to be submitted to the employer, which after that is submitted with the relevant ESI Branch Office by the employer.

Insurance Number

For the purpose of identification under the ESI scheme, an insurance number will be allotted to the employee.

Temporary Identity Card issuance

For availing the medical benefit for him/ herself or on behalf of his/ her family, a temporary identity card will be granted to employees for a duration of three months.

Permanent Photo Identity Card

Finally, a Permanent Photo Identity Card is issued.

What returns need to be filed after the finalizing of the ESI registration?

After ESI Registration, the annual return needs to be filed twice a year. Furthermore, the following documents are required to file the return;

Attendance register of employees
Register- Form 6
Wages’ register
Details of Monthly returns and challans
Register of any accidents occurred in the business premises

How Enterslice helps you to get ESI Registration?

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Frequently Asked Questions

How can I register for ESI?

For the purpose of registering an employee under the scheme, the employee needs to provide the employer (registered under ESIC) with the filled form and photographs of his own family members and will get an ESI card after registration.

How many employees are required for ESI registration?

A company which has more than 10 employees (in some states, it is specified as 20 employees) who draw a maximum salary/wages of Rs. 21,000, has to mandatorily register itself with the ESIC.

Is ESI mandatory?

Every company having the employee strength of more than 10 people mandatorily has to obtain ESI.

What documents are required for ESI registration?

Some important documents required for ESI registration include:

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 firm
MOA and AOA of the company
List of Directors and list of shareholders of the company
Month-wise compensation details of employment position, salary, etc.
A cancelled bank account cheque of the company
Attendance Register of the employees
PAN Card of the business entity as well as employees working under the entity
Copy of GST registration
A Declaration form obtained from each employee

What is ESI return?

All employers registered under the autonomous body “Employees’ State Insurance Corporation”, are required to file ESI returns twice a year. Some documents required for ESI return include Register of Attendance of the Employees, Form 6 – Register, Register of wages, inspection book, Register of any accidents on the premises, etc.

How can I claim ESI?

An employee needs to get the ESIC Form-9 to make a claim in case of sickness/temporary disablement/maternity benefit as provided by the Employees' State Insurance Corporation, Ministry of Labour and Employment.

Can we use ESI in private hospital?

As per the ESIC Act, an employee needs to take the medical benefits only from the ESIC dispensaries or hospitals. In case of emergency or in case of non-availability of ESIC facility in specific region, an employee can take the treatment from the private hospital with prior approval from ESIC.

Can I withdraw my ESI money?

ESIC is a kind of medical insurance for employees below a certain income level. ESI deduction is a premium; employees can claim medical reimbursements in the form of medical/cash benefits in case of need but cannot withdraw money therefrom.

What are benefits of ESI?

Some benefits of registering under ESIC scheme are as follows:

ESIC provides 70% of average daily wages in cash during medical leave, up to 91 days in two consecutive benefit periods.
ESIC provides monthly payment apportioned among dependants in case of death due to employment injury.
ESIC provides continuous monthly payment till injury lasts for temporary disablement and for whole life for permanent disablement.
Maternity Benefit to the women who are pregnant (paid leaves)

Can I continue ESI after leaving job?

Any ESIC card is valid until the end of the corresponding ESIC benefit period; however, the eligibility for various ESIC benefits is dependent upon the ESIC contribution made in the contribution period. Thus, the benefit of ESI can be claimed even after resignation, provided the ESIC benefit period is active.

Is ESI applicable for parents?

The ESI benefits include medical, cash, maternity, disability and dependent benefits to the insured persons under the ESI Act. The ESIC scheme provides medical benefits to an employee and his dependent family members (including parents).

Is ESI applicable for trainee?

The trainees are generally not paid salary, in spite they are paid stipend. Whether the person is trainee but if the trainee is satisfying Section 2(9) of the ESIC Act, the person will naturally called as ‘Employee’ under the section and will be covered under ESIC.

Who is covered under ESIC?

The ESIC Act is applicable to factories. And, it can be made applicable to shops as well. The ‘Factory’ means any premises where a manufacturing process is being carried out and the number of persons employed is at least 10.

What is the maximum salary limit for ESI?

Employees drawing wages up to Rs.21,000 per month are presently covered under the ESIC scheme with effect from 1-1-2017.

Is ESI deducted from basic salary?

The employee’s contribution is 1.75% of wages, rounder to next higher rupee. Employer’s contribution is 4.75% of wages payable to each employee, rounded off to next higher rupee. Wages include basic pay, dearness allowance, city compensatory allowance, payment of day of rest, overtime wages, house rent allowance, incentive allowance, attendance bonus, meal allowance and incentive bonus.

Why ESI is deducted?

It is the employers’ responsibility to contribute to the ESI fund by deducting the employees' contribution from wages and combining it with their own contribution. It gives a type of social security scheme for employees in the organized sector.

How can I change my mobile no in ESIC?

All details except name and date of registration can be rectified if wrongly mentioned earlier, subject to the submission of relevant documentary evidence. For this, the employees need to approach the nearest branch of ESIC. Also, the employee can update his details by visiting the online Employee Portal on ESIC.