Overview of ESI Registration

The Employees' State Insurance Act, 1948, was enacted by the Indian legislature as an integrated social insurance scheme. ESIC (Employees' State Insurance Corporation) is an autonomous body under the Ministry of Labor and Employment, which governs and regulates Employee State Insurance in India.

Employee State Insurance (ESI) is a self-financing social security scheme introduced for the benefit of Indian workers. It provides workers with a wide range of benefits such as medical care, financial assistance, and other support from their employer.

This scheme was introduced to assist Indian workers. Employees are offered various benefits, including medical care and financial assistance, through the employer. Any non-seasonal factory or company with more than 10 employees (or 20 employees in some states) earning a maximum salary of Rs. 21,000/- must mandatorily register with ESIC.

Under this scheme, the employer must contribute 3.25% of the total monthly salary of each employee, while the employee contributes 0.75% of their monthly salary. The only exemption from contribution applies to employees whose salary is less than Rs. 176 per day.

Eligible Entities for ESI Registration

Entities employing 10 or more employees are required to register for ESI, including:

• Newspaper Establishments
• Private Educational Institutions
• Establishments engaged in Motor Transportation
• Cinemas
• Restaurants and Hotels
• Shops

Applicability of ESI and Its Coverage

The entities mentioned above, employing 10 or more employees during the previous year, must mandatorily get ESIC registration. However, insurance deductions are made only for employees earning a monthly income of up to INR 21,000 (including basic wages and dearness allowance). In some states, the minimum number of employees for ESI applicability is 20.

The ESI scheme provides numerous benefits to covered employees, such as access to a large network of dispensaries, hospitals, and medical clinics, ensuring prompt medical care. An entity must obtain an ESI registration certificate within 15 days of becoming applicable. However, the specific ESIC regulations may vary from state to state, with certain rules and provisions differing accordingly.

Benefits of ESI Registration

1. Sickness Benefits
   Sickness benefits are provided to the employee at a rate of 70% of their salary if the sickness exceeds 91 days in a year, and the same is certified.

2. Medical Benefits
   Medical benefits are provided to the insured person and their family members. Full medical care is offered to all persons registered under ESI and their families from the day the person enters insurable employment. There is no ceiling on the expenditure for treatment. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs. 120/-.

3. Maternity Benefits
   Maternity benefits are provided to women in the form of paid leaves. The benefit for confinement/pregnancy is provided for three months, which is extendable by another month on medical advice, at the rate of full wages, subject to contributions for 70 days in the preceding year.

4. Deceased Employee
   In case of the death of an employee during employment, 90% of the insured person’s salary is given to the family of the deceased employee.

5. Funeral Expenses
   Funeral expenses are provided in case of the death of any employee covered under ESIC. An amount of Rs. 10,000/- is payable to the dependents or the person who performs the last rites from the day the employee enters insurable employment.

6. Retirement Benefits
   Medical care and benefits are provided after retirement or in old age.

7. Benefits for Permanent Disablement
   In case of permanent disablement of the insured person, 90% of their salary is provided as a monthly payment in the form of an insurance benefit.

8. Unemployment Benefits
   An insured person who has been insured for more than three years is eligible for unemployment benefits if they become unemployed. Under the Rajiv Gandhi Shramik Kalyan Yojana, unemployment allowance is payable to an insured person who becomes unemployed due to the closure of a factory, retrenchment, or permanent invalidity. The applicable unemployment allowances are:

   • Unemployment Allowance equal to 50% of the wage for a maximum period of up to one year.
   • Medical care for the insured person and their family from ESI hospitals/dispensaries during the period the insured person receives unemployment allowance.
   • Vocational training to upgrade skills, with expenses on fees and travel borne by ESIC.

Documents Required for ESI Registration in India

Since the procedure for registration is online, no physical documents are required to be submitted. However, the following documents are required during the online filing of the ESI application:

• Registration Certificate obtained under either the:
  • Factories Act, or
  • Shops and Establishment Act
• Certificate of Registration in case of a company, and Partnership Deed in case of a partnership
• Copy of Bank Statement
• Copy of License issued in the name of the establishment
• Memorandum of Association and Articles of Association of the company
• List of all employees working in the establishment
• Copy of Electricity Bill
• Copy of Rent/Lease Agreement
• PAN Card of the business entity as well as all the employees working under the entity
• Copy of Board Resolution
• Compensation details of all the employees
• Cancelled cheque of the bank account of the company
• List of Directors of the company
• List of Shareholders of the company
• Register containing attendance of the employees

In addition to the above documents, the following information/details are required:

• If any employee is already registered under ESIC:
  • Employee Insurance Number
  • Date of Appointment
• If the employee is not registered with ESIC:
  • Name of the employee
  • Name of employee's father/husband
  • Address
  • Date of Birth
  • Date of appointment
  • Details of nominees (name, address, mobile number, email ID, relationship details, etc.)
  • Bank Account Details (account number, branch name, bank name, IFSC code, etc.)
• Employer Information:
  • Employer code number
  • Employer Insurance number
  • Name of employer
  • Contact number of employer
  • Address of employer

Registration Procedure for ESI Registration in India

1. Log in to ESIC Portal
   The employer must get registered on the ESIC portal.

2. Sign Up
   The employer can register by clicking on the "Sign Up" button under the Employer Login option on the home screen of the ESIC portal.

3. Fill in the Details
   After clicking on the "Sign Up" button, the employer needs to fill in the required details and submit the form.

Payment for Registration

After submitting the Employer Registration Form-1, the "Payment of Advance Contribution" page will open. The employer needs to enter the amount to be paid and select the payment mode. The employer is required to pay the advance contribution for 6 months.

Registration Letter

Once the advance contribution for 6 months is paid successfully, the system will generate a Registration Letter (C-11) and send it to the employer. This letter contains a 17-digit Registration Number assigned by the ESIC department.
The Registration Letter (C-11) serves as valid proof of the employer's registration.

Penalty for Failure to Get ESI Registration & File Returns

If the employer fails to comply with the regulations, such as not getting the ESIC employer registration online or not filing the ESI returns, a fine of INR 10,000/- will be imposed.

Post-Registration Compliances Under ESI

Once the entity is covered under ESIC, it must comply with the mandatory guidelines set by the Act, including:

• Maintenance of an attendance register
• Maintenance of a complete register of wages for workers
• Inspection book
• Monthly return & challan filing by the 15th of the succeeding month
• Maintaining a register to record any accidents that happen on the premises

ESI Monthly Contribution

The ESI scheme is contributory, meaning both the employee and the employer are required to contribute a specific rate. These rates are subject to amendments from time to time. The following is the mandatory monthly contribution rate for both the employer and employee:

• Employee: The employee must contribute 0.75% of their basic wages to the ESI Fund.

• Employer: The employer must contribute 3.25% of the basic wage paid to employees.

Employees earning up to Rs. 137 per day in average wages are not required to contribute. However, it remains the employer's responsibility to contribute their share for these employees.

Returns Filed Every Year After the Registration is Finalized

After the registration ESI Returns have to be filed twice a year. The following Documents are required for the filing of the returns:

• Register of attendance of the employees.
• Form 6 - Register.
• Register of wages.
• Register of any accidents which have happened on the premises of the business.
• Monthly returns and challans.

Fastzeal Procedure for Payment Bank License

Utilize the steps mentioned above to integrate legally and securely for ESI Registration and enjoy the benefits in the form of enhanced insurance assistance. Our Fastzeal experts are here to assist you with guidance regarding ESI Registration and its compliance, ensuring the smooth functioning of your company in India. Fastzeal professionals will assist you in planning the process seamlessly and cost-effectively, ensuring the successful completion of the process.

It is advisable to appoint an attorney with "Insurance experience" to navigate through the potential challenges of ESI Registration and understand the requirements in detail. The necessary information from your side will be required to start the process. Once all the information is provided and the payment is received, the attorney will proceed with your request.

Why Fastzeal?

Fastzeal is a platform that helps fulfill all your legal and financial requirements and connects you with reliable professionals. Our clients have consistently praised our legal services! With our focus on simplifying legal processes, they have highly regarded us and appreciated the regular updates provided.

Our clients can track the progress at any time through our platform. If you have any questions about the ESI Registration process, our experienced representatives are just a phone call away. Fastzeal will ensure that your communication with professionals is smooth and hassle-free.

Steps for ESI Registration Assistance:

1. Purchase a Plan for Expert Assistance
2. Add Queries Regarding ESI Registration
3. Provide Documents to Fastzeal Expert
4. Prepare Application for ESI Registration & Complete Preliminary Screening Criteria
5. Complete Procedural Actions
6. Receive Your ESI Registration at Your Doorstep