ESI Registration

Understanding ESI Registration

The Employee State Insurance Corporation (ESIC), established by the 1948 Employees’ State Insurance Act, is a self-funded social welfare program overseen by the Ministry of Labor and Employment. It’s designed to provide Indian workers with comprehensive benefits like healthcare and financial aid from their employers. Factories and businesses with over 10 employees (or 20 in certain regions), where each earns up to ₹21,000 monthly, must enroll with the ESIC. Contributions are split between employers at 3.25% and employees at 0.75% of the employee’s monthly wages. Workers earning less than ₹176 daily are exempt from contributing.

Entities required to register for ESI include those with 10 or more employees, such as:

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

These organizations are obligated to obtain ESI registration to ensure their employees are covered under the Employee State Insurance scheme.

Applicability and its Coverage

The Employee State Insurance (ESI) applies to entities with 10 or more employees. These entities must secure ESIC Registration. However, ESI contributions are only for employees earning up to ₹21,000 monthly (including Basic wages + Dearness Allowance). Some states require a minimum of 20 employees for ESI applicability.

The ESI scheme offers a range of benefits through a vast network of healthcare facilities, ensuring prompt medical attention to insured workers. Entities must obtain an ESI registration certificate within 15 days of meeting the criteria. Note that ESIC rules can vary across different states.

If an employer does not comply with the ESI regulations, such as not obtaining the ESIC registration online or failing to file ESI returns, they will be subject to a penalty of ₹10,000.

Benefits of Registration with ESI

ESI Registration offers a comprehensive range of benefits for employees, including:

• Unemployment Benefits: Financial support during periods of joblessness.
• Medical Benefits: Access to medical treatment and facilities.
• Maternity Benefits: Assistance for expectant and new mothers.
• Deceased Employee: Support for the family of a deceased employee.
• Funeral Expenses: Coverage of funeral costs.
• Retirement Benefits: Provision for post-retirement life.
• Permanent Disablement Benefits: Aid for employees with permanent disabilities.
• Sickness Benefits: Compensation during illness-related work absences. These benefits ensure a safety net for employees and their dependents under various circumstances.

ESI Registration ensures employees receive:

Medical Benefits: Comprehensive healthcare for insured workers and their families from day one of insurable employment, with no spending limit. Retired or permanently disabled insured persons and spouses also get care for a nominal annual fee of ₹120.

Sickness Benefits: 70% salary for illnesses lasting over 91 days annually, upon certification.

Maternity Benefits: Paid leave for childbirth/pregnancy, extendable by a month on medical advice, at full wage for those who’ve contributed for 70 days in the previous year.

Deceased Employee: Families receive 90% of the deceased employee’s salary if death occurs during employment.

Funeral Expenses: ₹10,000 for funeral costs to dependents or those performing last rites, available from the first day of insurable employment.

Retirement Benefits: Ongoing medical care and benefits post-retirement.

Permanent Disablement Benefits: Monthly payment of 90% salary for permanent disability.

Unemployment Benefits: For those insured over three years, 50% wage as unemployment allowance for up to a year, medical care for self and family, and vocational training with expenses covered by ESIC, under the Rajiv Gandhi Shramik Kalyan Yojana.

Essential documents for ESI Registration

For ESI Registration in India, the online process requires digital copies of documents, including:

• Registration Certificate under the Factories Act or Shops and Establishment Act.
• Certificate of Registration for companies, Partnership Deed for partnerships.
• Bank Statement and License issued to the establishment.
• Memorandum and Articles of Association for companies.
• A list of employees, Electricity Bill, and Rent/Lease Agreement.
• PAN Cards of the business and all employees.
• Board Resolution and compensation details of employees.
• A cancelled cheque of the company’s bank account.
• Lists of the company’s Directors and Shareholders.
• An attendance register of employees.

Additional details needed:

• For employees already registered under ESIC: Insurance Number and Date of Appointment.
• For unregistered employees: Personal and nominee details, Bank Account Details, and Employer Information.

Compliance after registration of ESI

After registering under ESI, entities must adhere to the following compliance requirements as per the Act:

• Keep an attendance register.
• Maintain a detailed wage register for workers.
• Have an inspection book available.
• Submit monthly returns and challans by the 15th of the following month.

Maintain a record in the accident register for any incidents on-site.

Post-ESI registration 

Post-ESI registration, entities must file ESI Returns semi-annually. The essential documents for return filing include:

• Employee attendance register
• Form 6 – Register
• Wage register
• Accident register (for workplace incidents)
• Monthly returns and challans These documents are crucial for maintaining compliance with ESI regulations.

What is the Registration Procedure of ESI Registration in India?

Log in to ESIC Portal

Registration: Employers need to register on the ESIC portal by clicking the “Sign Up” button under the Employer Login option on the home screen.

Form Submission: Fill in the required details and submit the form. A confirmation mail will be sent to the registered email ID and mobile number containing the username and password.

Confirmation Mail

After submitting the sign-up form on the portal, the employer will receive a confirmation email sent to the registered email ID and mobile number provided during sign-up.

This email will contain the username and password details necessary for registering as an employer and employee under the ESIC scheme.

Employer Registration Form-1

• Next, use the username and password received in the email to log in to the ESIC portal. Navigate to the “New Employer Registration” tab and click on it.
• Next, select the ‘Type of Unit’ from the drop-down list and click on the ‘Submit’ button. The ‘Employer Registration – Form 1’ will appear, which the employer needs to fill out with the required details.
• The Employer Registration Form-1 includes details about the employer’s unit, as well as information about the employer and employees. Once the form is fully completed, the employer needs to click on the ‘Submit’ button.

Payment for Registration

After submitting the Employer Registration Form-1, the ‘Payment of Advance Contribution’ page will open. Here, the employer must enter the amount to be paid and select the payment mode. The employer needs to pay the advance contribution for six months.

Registration Letter

Upon successful payment of the six-month advance contribution, the system will generate a Registration Letter (C-11) and send it to the employer. This letter will contain a 17-digit Registration Number issued 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 & Returns

If an employer fails to register with ESIC or does not fulfill the ESI return filing procedure, they will be liable for a fine of INR 10,000/-.

Post-Registration Compliances Under ESI

Once covered under ESIC, the entity must comply with the mandatory guidelines issued by the Act:

• Maintain an attendance register.
• Keep a complete register of wages for workers.
• Maintain an inspection book.
• File monthly returns and challans by the 15th of the succeeding month.
• Maintain a register to record any accidents that occur on the premises.

ESI Monthly Contribution

The ESI scheme is contributory in nature, requiring both employee and employer contributions at specific rates, which may be amended from time to time. The current mandatory monthly contribution rates are:

• Employee: 0.75% of basic wages to the ESI Fund.
• Employer: 3.25% of the basic wage paid to employees.

Employees earning up to Rs. 137 of daily average wage are exempt from contribution, but employers must contribute their share for these employees.

Annual ESI Return Filing

After registration, ESI returns must be filed twice a year. The following documents are required for filing the returns:

• Register of attendance of the employees.
• Form 6 – Register.
• Register of wages.
• Register of any accidents that have occurred on the business premises.
• Monthly returns and challans.

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