ESI Registration

What is ESI Registration?

Employees state insurance (ESI) is one of the popular social security schemes brought into force by the central government after the independence of India. It is necessary for almost all the private limited companies to get them registered under the ESI Act 1948. In case they fail to obtain the requirement enrollment using ESI Registration procedure, then they have to face the penal actions in due course of time.

ESI (Employee state insurance) is a self-financing social security scheme and also a health insurance plan for Indian Workers. It also offers Medical and Disablement benefits and is managed by Employees state insurance corporation (ESIC). ESIC (Employment state Insurance Corporation) manages the fund as per the rules and regulations set by the Act.

According to the act, if any employee is earning less than Rs.15000 per month then he is liable to contribute 1.75% of his pay towards the ESI, while 4.75% will be contributed towards his ESI by the company. This scheme provides various benefits to the employers and has a large network of dispensaries, and hospitals throughout the country for efficient medical care. All the establishment/Units/factories with over 10 employees earning less than Rs.15,000 on monthly basis are required to mandatorily apply for ESI Registration.

Documents required for ESI Registration

  • PAN card of company/proprietor/Partnership/LLP

  • Aadhar card of directors/partners/proprietor

  • Premises proof (Rent agreement, electricity bill, NOC from the landlord, etc.

  • MOA and AOA in case of a private limited company, Partnership Deed for LLP's, etc

  • Registration certificate for all entities and commencement of production for factories

  • List of directors, partners, and shareholder of the company

  • List of employees with their monthly compensation

  • Bank statements of the organization

Benefits of ESI Registration

Sickness Benefit

It is the form of cash compensation at the rate of 70% of wages payable to the insured employees during the period of their certified sickness for a maximum of 91 days in the year. To be eligible for the sickness benefit, the insured worker is required to contribute for 78 days in the 6 months contribution period. Workers uffering from the long-term disease can claim extended sickness benefits for up to two years at the rate of 80% of wages.

Medical Benefit

People registered under ESI are provided with full medical care along with their family from the same day a person enters insurable employment. Medical care is also provided to the retired and the permanently disabled person who is insured

Maternity Benefit

It is provided for the Pregnancy/Confinement for three months, which is further extendable for one month on medical advice at the rate 100% of wages subject to the contribution for 70 days in the preceding years.

Disablement Benefit

From the day of entering insurable employment, temporary disablement benefit at the rate of 90% of wage irrespective of having paid any contribution. In case of permanent disablement, the benefit is paid at the rate of 9-% of wage on a monthly basis depending upon the extent of loss of earning capacity as it is certified by a Medical board.

Procedure for ESI Registration

1. Once the documents are ready, you can apply for the registration by submitting the Form-1 (Employer’s registration form)

2. Fill the form and submit it to ESIC for registration on the official site.

3. Once verification is done, a 17 digit unique identity will be provided to the organization. Once you receive a 17 digit number ESI filing can be done.

4. Employees who are registered under this scheme get an ESI card after submitting a form with the photograph and also the details of family members.

5. Registration is permanent and the number is valid for the lifetime of the company but if any change is required such as employee addition then need to be intimated to the ESI.

Resolve your queries

1. Is it necessary for employers to register under ESI?

Yes, it is mandatory for all those employers to register under ESI who comes under this act to register their Factory/unit/Establishment.

2. What is the ESI Code number?

It is the unique 17 digits identification number that is allotted to every establishment that is registered. This number gets generated through the ESIC portal after the submission of required information by the employer or can be generated on receipt of the survey report from the social security office.

3. Who is eligible for ESI?

All employees of a covered unit whose monthly income excluding bonus, overtime does not exceed Rs. 21,000 per month are eligible to avail of benefits under this scheme. ESI fund also offer cash and medical benefits to the employees and their immediate dependents

4. What are the benefits for ESI Registration?

  • It offers complete Medical benefit

  • Sickness benefit

  • Unemployment allowance

  • Funeral Expenses

  • Takes into account the requirements of the disabled

5. What is Sickness benefit?

The medical benefit includes complete medical treatment from start to finish. In case an employee requires the medical treatment and is absent from work for some medical issues, the sickness benefit is paid for the period the employee is absent after confirmation of an Authorised medical officer. This is for the period not more than 91 days in two consecutive benefit periods.

6. What is the Mode of payment of the contribution?

An Employer is used to file a monthly contribution online through the ESIC portal in respect of all employees after getting them registered. The amount of contribution done by the employer is calculated by keeping a record of the employee wise number of days for which the wages are paid as well as the number of wages paid to calculate the amount of contribution payable. The total amount of contribution in respect to all the employees must be deposited in any branch of SBI in cash or by cheque or DD (Demand Draft). Contribution can be paid online through SBI internet banking too.

7. Why is the registration of an employee mandatory?

The registration of the employee is mandatory to identify the employee and to provide them with the benefits under the Act which are related to the contribution made by the employer on behalf of all employees.

8. What are the documents required for ESI Registration?

  • Registration Certificate or the license obtained under shops and establishment Act or Factories Act.

  • MOA and AOA in case of a private limited company, Partnership Deed for LLP's, etc

  • Registration certificate for all entities and commencement of production for factories

  • List of directors, partners, and shareholder of the company

  • List of employees with their monthly compensation

  • Bank statements of the organization

9. What is the time limit for the payment of contribution?

The contribution will be paid for the employees into a bank within 21 days of the last day of the month in which contribution is due.

10. Is there any interest on delayed payment by the employer?

If the employer does not pay the contribution within the time limit then he shall be liable to pay simple interest at the rate of 12% per annum for each day of the delay in payment of contribution.

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