How to Start a ESIC REGISTRATION

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Overview of ESIC Registration

The Employee State Insurance (ESI) is a self-financing social security scheme designed to offer health and financial benefits to employees. This scheme provides various benefits to both employees and their families, including sickness benefits, disablement benefits, medical benefits, reimbursement of funeral expenses, and other related support. To be eligible for these benefits, employers with more than ten employees (in some states, the limit is extended to twenty employees) and whose employees earn a maximum monthly salary of Rs. 21,000 are required to obtain ESIC Registration.

The ESI Act, 1948, is the primary legislation governing the scheme, and the Employee State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labour and Employment, oversees its implementation and operations in India.

What is an ESI Scheme?

The ESI Scheme is a social security system aimed at providing protection to employees in case of unforeseen events such as maternity, sickness, disablement, and death due to workplace injuries. Additionally, the scheme offers medical care to insured employees and their family members (dependents).

What is an ESIC Code Number?

The ESIC Code is a 17-digit unique identification number assigned to every registered establishment. This number is generated when the employer submits the necessary details on the ESIC Portal or upon the completion of a survey by the Social Security Officer. The ESIC Code helps track the establishment’s compliance with the ESI regulations.

Benefits of ESIC Registration in India

The following listed are benefits of ESIC Registration:

  • It provides comprehensive medical benefits.
  • It includes dependants.
  • ESI Registration can be used easily at different ESI hospitals and dispensaries.
  • Any payments made will be compensated or reimbursed.
  • It also takes into account the needs of the disabled.
  • It provides easy access to medical care in ESI Dispensaries or Hospitals.
  • Sickness benefits are offered at the rate of 70 percent of the employee's salary. The same is provided if the sickness continues for more than ninety-one days a year.
  • Maternity benefits are given in the form of paid leaves.
  • 90% percent of the total salary of the insured person is given to his or her dependents in case of his or her death during employment.
  • Funeral expenses are provided to the deceased’s family.
  • In the Permanent Disablement case, 90 percent of the insured’s monthly salary is offered as an insurance benefit.

Who are eligible to obtain ESIC Registration?

The entities which are required to obtain ESIC Registration are as follows:

  • Shops;
  • Hotels or the Restaurants do not have any manufacturing activity but are engaged in providing service;
  • Cinemas;
  • An establishment engaged in Roadside Motor Transports;
  • Newspaper Establishments;
  • Private Medical or Educational Institutions.

Who is a Principal Employer as per the ESI Act?

A principal employer is usually the occupier or the owner of the factory to which the ESI Act applies. In the case of a Factory, either of the listed below can be considered a Principal Employer:

  • Occupier.
  • Owner.
  • Managing Agent of the Occupier or Owner.
  • Legal Representatives of the Deceased Occupier or Owner.
  • Factory Manager.
  • If the establishments belong to the Government of India.

However, in the case of any government-owned department, the head of the said department will be considered the Principal Employer. And, in all the other establishments, the person in charge of the Supervision and Control is called the Principal Employer.

Who is an Immediate Employer as per the ESI Act?

Immediate Employer can be either of those mentioned below:

  • One who executes or completes any work inside the factory of the Principal Employer.
  • One who executes or completes any work outside the premises supervised and managed by the principal Employer.
  • One who provides the on-hire services of his employees to the principal Employer of a factory or establishment.
  • And a Contractor.

Eligibility for ESIC Registration in India

Any establishment has more than 10 employees (in some other states, it is 20 employees) who have a maximum salary of Rs. 21,000/- has to compulsorily register itself with the ESIC within 15 days from the date of its applicability. Under the ESIC Scheme, the Employer needs to contribute an amount of 3.25% of the monthly salary paid to the employee, whereas the employee must contribute only 0.75% of their monthly salary. The only exemption to the employee in paying their contribution is whose salary is less than Rs. 176 per day.

Documents Required for ESIC Registration

The documents needed for obtaining ESIC Registration are as follows:

  • In the case of a company, a Certificate of Incorporation is required;
  • In the case of a Partnership Firm, Partnership Deed is required;
  • GST Registration Certificate of the establishment;
  • MoA (Memorandum of Association) and AoA (Articles of Association) of the company;
  • Address proof of the establishment such as:
  1. Latest utility bills like electricity bill, gas connection bill or telephone bill of the establishment not exceeding 3 months;
  2. Rental Agreement of the area or land on which the establishment is situated;
  3. Property tax receipts of the land where the establishment is situated.
  • A cancelled cheque of the company’s bank account;
  • List of all the directors of the company;
  • A register containing the employees’ attendance;
  • List of all the company’s shareholders;
  • The compensation details of all the company’s employees;
  • PAN Card of the establishment and all the employees working in the establishment;
  • A detailed list of all the employees working in the business establishment.

Procedure for ESIC Registration

The steps involved in the procedure for obtaining ESIC Registration are enumerated below:

Step 1: Visit the Official Website: For applying for ESIC registration, the applicant is required to visit the official ESIC website.

Step 2: Login Credentials: The said applicant can sign up by making his password and username. These login credentials can further be used for the purpose of filing returns or doing other similar nature activities.

Step 3: Confirmation Mail: Now, in the next step, a confirmation mail will be sent to the applicant’s registered E-mail ID and also on the registered mobile number.

Step 4: Enter the Login Details: Now, the applicant is required to login into his account by using the already provided username and password.

Step 5: Fill in the Application Form: In the fifth step, the applicant is asked to complete all the necessary details of the application form.

Step 6: Payment of Fees: Once the application form is duly completed by the applicant, he or she is required to finally submit it by paying the prescribed fee. The fee prescribed is paid online and the same Act as an advance contribution for the coming six months.

Step 7: Issuance of the ESIC Code Number: In the last step, the authorities, after verifying all the details and the documents submitted, the authority will issue a registration certificate to the applicant. The authority having the power to issue the certificate of registration is the Employee State Insurance Corporation. This registration certificate also contains the ESIC Code, which is a 17-digit Unique Identification Number.

Post-Registration Compliances under the ESI Act

Once an establishment or a factory is registered under the provisions of the ESI Act, the said establishment is then required to comply with some of the mandatory guidelines prescribed by the Act:

  • Maintenance of an attendance register.
  • A complete register having the details of the wages paid to the workers.
  • Inspection book.
  • Monthly return and challan by the 15th of the following month.
  • Maintenance of a register having a record of the accidents that took place on the premises.

Post Registration Returns

After the ESIC Registration, the employers have to file ESI Returns half-yearly. The following vital documents are required for the filing of the returns:

  1. Form 6 – Register;
  2. Register of wages;
  3. Monthly challans & returns;
  4. Register of employees' attendance;
  5. Register of any accidents or incidents which have happened on the business premises.

Penalty in case of failure to Get ESIC Registration and Returns

In case of any non-compliance by an employer in India, such as failure to get ESIC Registration or not to comply with the ESI Returns, the Employer shall be liable for a fine of Rs. 10,000/-.