What is ESI Registration?

Employee State Insurance, or ESI, is administered by the Employee State Insurance Corporation, an autonomous organization established by legislation under the Ministry of Labor and Employment of the Government of India.

This programme was created specifically for Indian laborers. The company provides a wide range of medical, financial, and other benefits to the employees. The ESIC requires every non-seasonal factory or business with more than 10 full - time employees (in some states, it's 20) and a maximum pay of Rs. 21,000/- to register.

The company is required to contribute 3.25 percent of the entire monthly salary payable to the employee under this scheme, whereas the employee is simply required to contribute 0.75 percent of his monthly wage every month of the year. Only employees earning less than Rs. 176/- per day are excused from paying their contribution.

The Advantages of ESIC Registration:

Few of the advantage for signing up for this programme are listed below. Here are a few examples:

    • In the event of any certified illness lasting for a maximum of 91 days in any year, sickness benefits at a rate of 70% (in the form of salary) will be paid.

    • An employee's and his family's medical benefits.

    • Pregnant women receive maternity benefits (paid leaves).

    • If an employee dies while on the job, 90 percent of his or her salary is paid to his or her dependents in the form of a monthly payment after the person's death.

    • In the event of an employee's disability, the same rules apply.

    • Expenses for a funeral

    • Expenses associated with medical treatment for the elderly.

Required Documents for ESI Registration

The following are the documents needed to register for ESI:

    • Obtaining a registration certificate under the Factories Act and the Shops and Establishment Act

    • MOA and AOA of the company MOA and AOA of the company Certificate of registration in the case of a company and partnership deed in the case of a partnership firm

    • Employee details such as name, father's name, mobile number, date of birth, date of joining, salary, postal address, name of nominee, grade, identity proof such as PAN or Aadhaar, bank account number, etc. are included in the list.

    • Employees' attendance registers

    • The commercial establishment's PAN card

    • Scanned copies of the company's licenses, such as the GST license.

    • A cancelled check drawn on the company's bank account

    • The proprietor, partner, or director's digital signature, as the case may be

    • A list of directors

    • List of stockholders

    • Proof of address of the proprietor, partner, or board of directors, as the case may be

    • The phone number and email address of the company's founder, partner, or director, if applicable.

Process of ESI Registration

Previously, registration was done manually. ESIC registration is now entirely online. The steps that need to be followed for ESIC Registration are as follows:

Step 1: Go to the ESI Portal and log in.

An employer must create an account on the ESIC website.

Employers can create an account on the ESIC portal by navigating to the home page and selecting the 'Sign Up' option under the 'Employer Login' option.

Employers must fill up the details and submit the form after clicking the 'Sign up' button.

Step 2: Sending a Confirmation Email

The employer will receive a confirmation email to the registered email id and cellphone number submitted at the time of sign up after submitting the form for portal sign up.

The login and password for registering as an employer and employee under the ESIC programme will be included in the email.

Employer Registration Form-1 (Step 3)

Then, using the username and password you received in the letter, log in to the ESIC portal. This will take you to a page where you can register as a new employer.

Select 'New Employer Registration' from the drop-down menu. Then, from the drop-down list, choose the 'Type of Unit' and click the 'Submit' button. The 'Employer Registration – Form 1' will display, which the employer must complete.

The Employer Registration Form-1 contains information on the employer's unit, the employer, and the employees. After the employer has filled out the entire form, he must click the 'Submit' button.

Payment for Registration (Step 4)

Following the submission of the Employer Registration Form-1, the 'Payment of Advance Contribution' page will appear, prompting the employer to enter the amount to be paid and the payment mechanism.

The employer will be responsible for paying the advance payment for a period of six months.

Step 5: Write a letter of registration

Following the successful payment of the six-month advance contribution, the ESIC department will send the employer a system-generated Registration Letter (C-11) with a 17-digit Registration Number.

The Registration Letter (C-11) is a legal proof of the employer's registration.

Failure to get ESI registration and returns will result in a penalty.

Any non-compliance by an employer, such as failing to register as an ESIC employer online or failing to comply with the ESI return filing procedure, will result in a punishment of INR 10,000/-.

What are the ESI Post-Registration Requirements?

Once an entity is covered by ESIC, it must follow the Act's mandatory rules, which include:

    • Keeping a record of attendance

    • A full wage register for workers

    • Book of inspection

    • Monthly returns and challans are due by the 15th of the following month.

    • The register was kept to keep track of any mishaps that occurred on the premises.

After the registration, how many returns are filed per year?

After completing the registration process, ESI will contact you. Returns must be filed twice a year, and the following papers must be included in the filing: • Employees' Attendance Register • Register of Wages  • Form 6-Register • Keep track of any accidents that have occurred on the business's premises. • Returns and Challans are due every month.

After the registration, how many returns are filed per year?

After completing the registration process, ESI will contact you. Returns must be filed twice a year, and the following papers must be included in the filing: • Employees' Attendance Register • Register of Wages  • Form 6-Register • Keep track of any accidents that have occurred on the business's premises. • Returns and Challans are due every month.

Frequently asked questions:

    1. What exactly is the ESI Scheme?

The ESI programme is a comprehensive social security scheme that is designed to socially safeguard employees in the organized sector in the event of sickness, maternity, disability, or death as a result of work-related damage.

    2. Who is not qualified to register for ESIC?

Employees or workers earning more than Rs.21,000 per month are not covered by ESIC, while the maximum wage for a person with disabilities is Rs.25,000.

    3. Who does not qualify for ESIC?

Employees of a covered unit who earn less than Rs. 21,000 per month will be eligible for benefits under the Scheme. Employees with a daily average remuneration of up to Rs. 176 are excused from paying ESIC.

    4. On what kind of wage does ESIC kick in?

The ESI Act covers employees whose monthly salary are less than Rs 21,000 per month. In December 2016, the Act's pay ceiling was raised from Rs 15,000 per month to Rs 21,000 per month.

    5. Is ESI registration required?

Yes, under section 2A of the Act and regulation 10-B, the employer is required to register their firm under the ESI Act within an stipulated time of 15 days on the date of applicability issued to them.

    6. What are the basic wages used in the ESI calculation?

Wages covered by ESIC are calculated as the sum of Basic Pay + Dearness Allowances, excluding any overtime worked by the employee.

    7. How is the scheme financed?

The ESI programme is a self-funding programme. Employer and employee contributions are principally used to support the ESI funds, which are provided monthly at a fixed percentage of salaries received.

    8. Is the amount removed from each employee's pay the same?

No, the least amount to be deducted for the programme is 1.75 percent of an employee's salary, and the basic compensation for an employee to be enrolled is 15,000. If the employee's pay surpasses 15,000, the amount of deduction will be adjusted appropriately.

    9. Is there any interest if you pay late?

Yes, Let's say the employer fails to pay the contribution amount within the agreed-upon time frame. In that instance, he is obligated to pay a 12 percent annual interest rate based on the number of days he is late.

10.Is the ESIC Registration Certificate a requirement for the units?

Yes, by registering their entity under ESIC, every entity eligible under the ESIC Act will receive a certificate. ESIC's official website is where the applicant can apply online.