ESI Registration

ESI Registration

Any company or institution that has more than a minimum amount of employees would have to go for the process of ESIC Registration. ESIC is an abbreviation for Employees State Insurance Corporation. This is headed by an independent authority known as the Employees State Insurance Corporation. Under the ESI registration scheme, social security benefits are provided to workers. Apart from social security, this scheme also acts as a health insurance benefit.

Package inclusions:
  • Process of ESIC registration.
  • Applicability criteria for ESIC registration.
  • Employer and Employee Registration under this process.
  • End-to-End Documentation.
  • Consultancy Based Services related to ESI.
  • Any changes on notifications provided by government on registration.
ESI Registration

ESIC Registration - An Overview

The Government brought out this scheme as a health benefit and social security scheme for employees and workers. Under this scheme, employees can avail benefits related to health to meet unforeseen circumstances such as sickness and accidents.

This came as a social insurance scheme to protect employees and workers. This scheme is only related to contingencies which arise in work such as sickness, maternity, physical disablement, temporary disablement, permanent disablement and death.

The Central government brought out this scheme by utilising an autonomous body known as the Employee State Insurance Corporation. This was brought out as a measure to mitigate the loss and the fill the gap by providing earnings through this scheme. Apart from this, there were other labour laws which were brought out. All these laws complied with the International Labour Organisation (ILO).

Any institution or organisation would require registering under the ESIC.  However, there are specific eligibility criteria to be satisfied for this to apply to a particular scheme.

Meaning of ESIC Registration

All institutions and organisations would have to register as per the guidelines of the Employee State Insurance Act, 1948. However, there are specific requirements which have to be met by the employer and employee. Such requirement is the amount of contributions for the registration. The contribution amount has not changed since the year of 1997. However, this amount of contribution was reduced by the government in the year 2019.

Previously the amount of contribution stood at 6.5%. However this has been reduced to 4%. Hence the amount of contribution provided by the employer would remain at the rate of 4%.

As per the Employee State Insurance Act of 1948 establishments and other industries are required to take ESIC registration, if a specific criterion has been met. Previously an establishment or a factory where employees earn more than Rs. 15,000/- are required to take this registration. However, this requirement has been increased.

An employer after registration is required to contribute 4% and the employee is only required to contribute 1%. Now there have been changes regarding the amount of monthly contribution. Previously the amount of monthly contribution stood at the rate of 4.75 % of the employee’s salary. This contribution would be relating to the amount contributed from the employer. 1.75% was required to be contributed from the employee’s salary under ESIC registration.

However, this system has changed and the percentage of contribution made by the employer and employee has been reduced. Under the system of ESIC registration, an identification number is provided to employer. This number is a 17 digit configuration number provided.  This information would be provided as soon as the registration is completed on the online ESIC registration portal. This would also be considered to be received after the survey report from the SSO (Social Security Officer).

Benefits of ESIC Registration

Benefits of ESIC Registration

  • Medical Benefits

One of the main objectives of taking this form of registration is medical benefits to employees and workman. If any sickness or other contingency is experienced by workforce, then the same can be availed immediately by an affected worker.

  • Social Security

The ESI registration scheme was brought out as a social security provided by the government. Through this scheme, social security features such as maternity benefits, sickness allowance and other related benefits are provided.

  • Easy Processing

Benefits under this system can be availed easily at any hospital or health care centre. All payments which are used under this system can be compensated.

  • Benefits related to Sickness

Through the ESIC registration, all employees would be offered different form of sickness benefits. These benefits are offered at a rate of 70% of the salary of the employer. This amount would be considered and provided if the sickness extends over three consecutive months or 90 days.

  • Maternity Benefits

Every organisation taking up this scheme would have to provide maternity benefits such as maternity leave during pregnancy.

  • Disability Benefits

Disability Benefits are also covered as a part of this scheme. In an unforeseen event in a permanent disability or the death of the employee, this can be claimed by the dependants of the employee.

Hence for the above, every establishment should secure the ESIC registration.

Which establishments can take the ESIC registration?

The above institutions can take the online ESIC registration:

online ESIC registration

  • Shops

Any shops which employ personnel for carrying out different activities have to secure this form of registration.

  • Movie Theatres

Any Cinema or Movie theatre would require taking this registration under the Employee State Insurance Corporation Scheme. As more than 50 individuals would be engaged in providing services in a theatre.

  • Hospitals and Other Medical Institutions

Registering for a hospital is mandatory under this act, as it employs more than the above limit.

  • Private Education Institutions

ESIC registration is mandatory for any private educational institution or school.

  • Roadside and Other forms of Establishments

Any establishment which is engaged in carrying out motor vehicle transport system has to register under this system.

  • Restaurants and Hotels which provide Service

Any catering services offered in Restaurants and hotels should take this form of registration.

Meaning of Principal Employer under ESIC registration

Principal Employer under ESIC registration

  • Occupier

Occupier can be the owner or the manager of the premises. However, this meaning has been taken and considered also in the implementation made under the Social Security Code, 2020.

  • Owner

Owner would include the entity or an individual who has direct control over managing the affairs in the premises.

  • Agent who Manages the Premises

An agent, who manages the premises, would include any individual who carries out managerial activities of the premises. If the premises is a company, then the agent can be a managing director.

  • Legal Representatives

The principal employer would also include the legal representatives of the deceased employer or the occupier.

  • Manager of Factory

The principal employer can be the manager of the factory, who has the authority to look after the affairs of the factory or establishment.

  • Establishments under Government of India

Any establishment or institution belonging to the government of India would also be considered as the principal employer under this act. When it comes to any government department, then the HOD or head of department would be considered as the principal employer.

Immediate Employer under the ESIC Registration Process

When construing the above terms, there has to be a difference between principal employer and immediate employer. An immediate employer is an individual carrying out activities under the principal employer.

The following are immediate employers under the Employer State Insurance Corporation Scheme:

  • A contractor of the factory or the premises.
  • An individual who carries out the work and processes within the premises or factory.
  • Any individual who carries out the work outside the factory premises, however who is under the principal owner.
  • Any employer who provides contract past service to the principal employer. These individuals are known as temporary employees or temp workers.

Eligibility for ESIC Registration

The following requirements have to be satisfied by the employer to be eligible for ESIC registration:

  • Requirement of Minimum Employees

Under the Employee State Insurance Act of 1948 there is a requirement to have minimum amount of employees for an organisation or establishment to register. Usually it is more than 10 employees for particular states. However, some states consider an organisation having more than 20 employees to register with the authority. Hospitals, Restaurants and other establishments would also have to consider ESIC registration, if there are more than 20 employees.

  • State Requirements

The provisions of this act would be applicable throughout India. However, specific states have the requirement to hire more than 20 employees to be applicable for registration under this act.

  • Monthly Salary of Employee

Another threshold to determine the applicability of this scheme is the amount of salary earned by an employee. Previously this amount was at Rs. 15000/- per month. However, the limit has increased to Rs. 21000. This amendment was introduced in 2016.

  • Organisation requires registering with EPFO

An organisation has to register with the EPFO to be eligible for this.

  • 4% has to be provided by the employer

Under ESIC registration, the employer is liable to pay some contribution for every employee. This contribution would be the monthly contribution.

  • 1% has to be provided by the employee

Under this process, 1% has to be deducted from the wages provided to the employee. All these payments have to be paid within 15 days of the calendar month in which the contributions or deductions are due.

Process of Online ESIC Registration

Process of Online ESIC Registration

  • Go to the Website

An applicant for ESIC registration must go to the official government website ESIC login (esic.in).

  • Credentials for Login

The applicant should enter details such as the name and provide a registered email address. After this process, the applicant will receive the credentials for login.

  • Receive Confirmation mail

Once the credentials are provided, then the applicant will receive a confirmation. The applicant would have to login in his email to check for the confirmation email.

  • Enter Login

After confirming the same; the applicant can put the user name and password for login with the ESIC registration portal.

  • Fill Application Form

In this step, the applicant must provide all information regarding the organisation. All fields that are market with an asterisk (the applicant must mandatorily fill *).

  • Pay Fees

Once the form is filled, the applicant is required to pay the fees. This would act as an advance contribution for 6 months.

  • Receive the ESIC Number

In the last step, once all the information is verified the authority and competent officer will grant the ESIC number.

Updates in ESIC Registration process

  • Social Security Bill, 2020

Recently the parliament passed the Social Security Code, more prominently known as the Social Security Bill. This bill makes amendments to the Employee State Insurance Act, 1948. Under this reform, all employers would have to mandatorily take the ESIC registration, even if the employer has lesser than the minimum amount of employees.

  • SPICe Form- March 2020

With the incorporation of SPICe all companies and organisations are required to obtain ESIC registration.

  • MCA Portal

with the introduction of SPICe, the process of One Person Company, private limited company and public limited company can be done through the MCA. However, this would only be applicable for ESI and EPFO registrations.

  • AGILE for GST registration makes the process to secure ESIC registration more seamless.

Hence compulsory registration is required as a reason of these amendments.

Are there any post compliance requirements after ESIC registration?

An employer must maintain specific records to be filed with the regulatory authority once the registration process is complete. However, apart from the above, there are also other forms of compliances to adhere to:

  • Have an attendance register.
  • Details of Wages Paid to Workers.
  • Have an Inspection book.
  • Monthly return and other information by the 15 of next month.
  • Maintain a record of accidents in premises.

Documents for ESIC Registration

The following documents are required for ESIC registration:

  • Form 01: Registration of Employer
  • List of employees
  • Memorandum of Association {MOA}
  • Article of Association {AOA}
  • Certificate of Incorporation or the Partnership Deed
  • Copy of the PAN (Permanent Account Number) Card of the entity
  • Bank Statements of the Business
  • GST Registration
  • Factory or the Shop and Establishment Registration
  • A copy of LLP Agreement
  • Declaration Form from each employee
  • Two passport-sized photographs
  • PAN Card of Employees
  • Aadhaar Card of Employees
  • Nominee details of the insured person.

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Frequently Asked Questions

Yes an individual must provide all details pertaining for ESIC registration. Along with every other information which is requested for.

If the organisation is hiring more than 10 employees then such registration is mandatory requirement.

During the process of registration of ESI, a unique number is provided for procedural purposes. This number must be quoted every time for operational purposes.

Once all the registration is complete the employer or factory is required to file the below registrations:

• Information on Wages

• Form- 6

• Attendance of employees register

• Challans for every month

• Any accidents which occur on the business premises.

Yes the employee has to make an application for claiming the ESI. The employer has to respond by providing Form-9.

Usually government registered hospitals and other health care institutions can be used for claiming portion of the ESI. However, with the approval of the Employee State Insurance Corporation, an employee may be allowed to use the funds under ESI scheme.

This scheme is made for employees who earn income below a particular level. ESI cannot be withdrawn; however it can be used as a part of the medical insurance.

Yes under the ESI act apprentices are covered. However, it may or may not be applicable for trainees. This would be dependent on the amount of salary they are earning. Under section 2(9) of the ESIC act, this would be applicable if the trainee is earning more than the other amount.

The term wages would include the following:

• Basic Pay,

• City Compensatory Allowance (CCA)

• Dearness Allowance (DA),

• Payment of the Day of Rest,

• Overtime Wages,

• Attendance Bonus,

• House Rent Allowance (HRA),

• Incentive Allowance,

• Meal Allowance, and

• Incentive Bonus.

The main purpose of ESI deduction is to act as a social security to individuals who are engaged in different premises.

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