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