Income Tax

Employee State Insurance: Its Concept and Process for Registration


ESIC is the acronym form for the Employee State Insurance Corporation. This is an autonomous body established by the Ministry of Labor and Employment that regulates and administers the Employee State Insurance in India. Further, the Employee State Insurance is a self-supporting social security scheme that started for the benefits of the Indian workers by offering them all the possible necessary benefits such as the medical facility, monetary facilities and some other benefits from the concerned employer. Furthermore, the ESIC is managed and governed by the rules and regulations issued by the Employee State Insurance Corporation Act, 1948. Lastly, acquiring Online ESIC registration is compulsory and mandatory for the entities employing, employees earning rupees fifteen per month or less as the wages or salary.

What are the Eligible Entities for the ESIC Registration?

The Entities eligible to get themselves registered under the Employee State Insurance Corporation are heavily penalized in case they failed to do so. Following are the listed entities employing ten or more employee shall mandatorily get themselves registered under the Employee State Insurance Corporation –

  1. Shops
  2. Restaurants and Hotels
  3. Cinemas
  4. Establishments engaged in Motor transportation
  5. Private education institutes
  6. Newspaper establishment

What is the Applicability and Coverage of Employee State Insurance Act?

The above-mentioned entities or organization, if employed ten or more employees at any time during the previous financial year shall mandatorily need to take the Employee State Insurance Corporation Registration. But, the insurance is deducted only for those employees who are earning monthly income up to rupees twenty-one thousand (Basic wages plus Dearness Allowance). In a few states of India, the coverage of Employee State Insurance Corporation and the applicability is limited to minimum employee strength of twenty or more

The Employee State Insurance (ESI) scheme offers several benefits to the employees covered under the ESI with a large network of medical clinics, dispensaries, the hospital for providing the quick medical care to the insured person. Further, an entity needs to obtain an ESI registration certificate within a period of fifteen days of becoming applicable. However, the ESIC regulations vary from state to state, and thus, certain rules and regulations vary accordingly.

What are the Benefits of the ESIC Registration?

Following listed are the benefits annexed with the concept of ESIC Registration –

  1. Benefits in case of the illness at the rate of 70 percent (in the form of salary), also in the case of any certified sickness or illness and which may last for a maximum period of ninety-one days in any year
  2. Medical Benefits to both the employee and his family members
  3. Maternity benefits to the woman who is pregnant in the form of a paid leaves
  4. In case, where an employee dies at work, then, in this case, the ninety percent of the salary is given to his legal representatives or the direct dependents every month after the death of the concerned employee
  5. Same as the above-mentioned point in case of any disability to the employee
  6. Funeral expenses
  7. Old age care medical expenses

What is the Procedure for Obtaining the ESIC Registration?

Following are the steps involved in the procedure for obtaining the ESIC Registration –

  1. Apply online by way of new registration options available on the official ESIC website, i.e.  
  2. The concerned applicant can sign up by making his own user-id and password, which can be used by him further for the purpose of return filing or other similar nature activities.
  3. Next, a confirmation mail is sent by means of registered mail id and also on the mobile number entered at the time of sign up.
  4. Now, Login using the same provided user id and password for completing the online application form.
  5. In the next step, the applicant is required to complete all the necessary details of the application, and compulsorily the one marked with Asterisk (*).
  6. After the application form is completed, finally submit it by paying the online prescribed fee as the advance contribution for six succeeding months
  7. Lastly, the registration certificate is allotted by the Employee State Insurance Corporation, together with a 17 digit registration number once the application form is duly submitted.

What are the Documents Required in the Process of ESIC Registration?

Following are the Documents required in the procedure of ESIC Registration

  1. Any License or the registration certificate issued under the Shops and Establishment Act
  2. Memorandum of Association and Article of Association in case an applicant is a Company
  3. Partnership deed if the concerned applicant is a partnership firm
  4. LLP Agreement in case of a Limited Liability Partnership
  5. Registration certificate for other types of entities and the certificate of commencement of the production of factories.
  6. PAN Card of the business
  7. PAN Card and Aadhar Card of employees
  8. Nominee details of the insured person
  9. Bank statement of the concerned organization

What are the Post Registration Compliances Regarding the Registration of Employee State Insurance Corporation?

Once the entity is duly covered under the Employee State Insurance Corporation, it needs to comply with certain mandatory guidelines as issued and prescribed by the Act –

  1. A complete register of the wages offered to the workers
  2. Inspection book
  3. Monthly return and Challan within the 15th of succeeding month
  4. The register maintained to record any sort of accidents that happened within the premises.
  5. Maintenance of the attendance register

What is the Monthly Employee State Insurance Contribution?

Following is the monthly contribution rate that is to be mandatorily contributed by both the employer and employee –

  1. Employee – The Employee has to contribute 3.25 percent of his basic wages to the Employee State Insurance Fund
  2. Employer – The Employer has to contribute 0.75 percent of the basic wages paid to employees.

Hence, a total of 4 percent of employee wage is to be deposited to the Employee State Insurance Fund monthly.

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