ESIC Registration is mandatory for establishments with 10 or more employees. Filecrat will get your business registered with ESIC with ease.
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The government has mandated registration under the Employees State Insurance Scheme ESI Registration for certain establishments to assist their employees & workers in meeting their expenses during greater needs of medical and other emergencies such as sickness, injury, maternity, disablement and after the death of the employee. Employees State Insurance Scheme of India ensures social security through socio-economic protection of the employees and their families working in companies, factories and other establishments under the Employees’ State Insurance Act, 1948.
Characteristics of ESI Registration
- Self-financing scheme of Indian ministry of Labour and Employment
- Monthly contribution of both employer and employee at a fixed percentage of wages of concerned employee.
- Apart from employer and employee, State governments also contributes 12.5 % (1/8 share) of the cost of medical benefits to the employee.
Applicability of ESIC Registration
- Non-power using factories and establishments having not less than 20 employees.
- Factories and establishments using power and having not less than 10 employees. It covers the following establishments (This is regulated by State Governments and some states require minimum 20 employees and does not include Medical & Educational Institutions):
- Hotels or restaurants
- Non-banking financial companies
- Airport authorities
- Warehousing establishment
- Contract and permanent employees of Municipal Corporation/ Municipal Bodies
- Roadside Motor Transport Establishments
- Newspaper establishments
- Private Medical Institutions
- Other Educational Institutions
- Port authorities
Benefits & Advantages
Subject to the provisions of Chapter V of Employees’ State Insurance Act, 1948, the insured employee will get the benefits under following circumstances:
- Accidents happening while commuting to the place of work and vice versa
- Any Occupational disease
- Disablement benefit (Temporary & Permanent disablement)
- Accidents happening while travelling in employer’s transport
- Accidents happening while meeting emergency (during the course of employment)
- Maternity Benefit
- Sickness benefit.
- Benefits to the dependents of employee
- Other medical benefits to employee and his/her family members
- Support to the family members after death of employee
- Old age care
- Funeral Expenses
Note: No cash will be provided to the employee or his/ her family members in case of medical emergency but it will be covered under the scheme as follow:
- No need to pay the expenses on ESI hospitals and dispensaries
- There will be reimbursement against the bills of medical expenses
Compliances after Registration
- Contribution of employer and employee of 3.25 % and 0.75% respectively of the wages of the employee.
- Filing of ESI returns twice in a year with the following documents:
- Copy of Daily Attendance Register of the employees
- Form 6
- Copy of Register of wages
- Monthly returns and challans
- Details of accidents on the working area of business
- Consultation with our Expert
- Drafting of documents
- Filing of Forms
- Obtaining ESI Code
From the Employer:
- Certificate of Incorporation/ Registration Certificate
- Memorandum and Articles of Association/ Trust Deed/ Partnership deed
- License issued under Shops and Establishment Acts/ Factories Act
- Address Proof (may submit rent receipts)
- GST Registration Certificate
- PAN of the entity
- Employees’ details along with their position, salary and other essential particulars
- Bank Statement
- Cancelled cheque of the Company bank account
- List of directors and shareholders
- Digital Signature of anyone of the director
From the Employee:
- Identity proof
- Address proof
- Dependant’s list
Factory means any premises wherein ten or more persons are employed or were employed on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on, but does not include a mine subject to the operation of the Mines Act 1952.
Employee means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and who is directly employed by the principal employer of the factory; or is employed by an immediate employer or under the supervision of the principal employer; or whose services are temporarily lent or let on hire to the principal employer by a contractor.
Family means all or any of the following relatives of an insured person:
- a spouse
- a dependent child who is receiving education till he/ she attains the age of twenty-one years,
- an unmarried daughter
- a child with any physical or mental abnormality or injury so long as the infirmity continues
- dependant parents, whose income does not exceed such income as may be prescribed
- a minor brother or sister who is dependent on an unmarried insured person
The ESI Scheme is administered by a statutory corporate body called the Employees' State Insurance Corporation (ESIC) under Ministry of Labour and Employment.
This is a self-financing scheme of Indian ministry of Labour and Employment funded through monthly contribution of both employer and employee at a fixed percentage of wages of concerned employee. Further, State governments also contributes 12.5 % (1/8 share) of the cost of medical benefits to the employee.
Yes, it is the statutory responsibility of the employer under Section 2A of Employees’ State Insurance Act, 1948 and regulation 10-B, to register their non-seasonal factory/ company/ establishment along with the details of the employees.
In that situation, he continues to be an employee till the end of that contribution period and the contribution will be deducted and paid on the total wages earned by him.
An interest rate of 12% per annum will be charged from the employer in respect of each day of delay or default in payment of contribution.
These are the following members excluded from ESI scheme:
- A proprietor or a partner whether drawing salary or not
- A contractor lending the services of his employees
- An apprentice engaged under the Apprentice Act, 1961
- Persons employed on contract for service such as legal, technical, tax consultants etc.