ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation which is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India.
This scheme was started for Indian workers. The workers are provided with a huge variety of medical, monetary and other benefits from the employer. Any non-seasonal factory and company having more than 10 employees (in some states it is 20 employees) who have a maximum salary of Rs. 21,000/- has to mandatorily register itself with the ESIC.
Under this scheme, the employer needs to contribute an amount of 3.25% of the total monthly salary payable to the employee whereas the employer needs to contribute only 0.75% of his monthly salary every month of the year. The only exemption to the employee in paying his contribution is whose salary is less than Rs. 176/- per day.
E.S.I.C. contribution rates are reduced W.E.F. 1st July 2019.
Entities Covered Under ESIC
As per the government notification dated Sec 1(5) of the ESI Act the following entities are covered:
Restaurants or hotels engaged only in sales.
Road motor transport establishments.
Newspaper establishments (which is not covered under the Factory Act).
Private educational institutions.
ESIC Registration Process
Earlier, there was manual registration. Now, the ESIC registration is completely online. Following are the steps involved in ESIC Registration:
Step 1: Log in to ESIC Portal
An employer needs to get himself registered on the ESIC portal.
An employer can register on the ESIC portal by clicking on the ‘Sign Up’ button under the ‘Employer Login’ option on the home screen.
After clicking on the ‘Sign up’ button, the employers need to fill in the details and submit the form.
Step 2: Confirmation Mail
After submitting the form for sign up to the portal, the employer will receive a confirmation mail sent to the registered mail id and mobile number entered at the time of sign up.
The email will contain the username and password details for registering as an employer and employee under the ESIC scheme.
Step 3: Employer Registration Form-1
Next, log in to the ESIC portal along with the username and password received in the mail. This will redirect to the page having the option of ‘New Employer Registration’.
Click on the ‘New Employer Registration’ option. Next, select the ‘Type of Unit’ from the drop-down list and click on the ‘Submit’ button. The ‘Employer Registration – Form 1’ will appear and the employer needs to fill in the details.
The Employer Registration Form-1 contains details pertaining to the unit of the employer, details of the employer and employees. Once, the complete form is filled by the employer, he needs to click on the ‘Submit’ button.
Step 4: Payment for Registration
After submission of the Employer Registration Form-1, the ‘Payment of Advance Contribution’ page will open where the employer needs to fill the amount to be paid and select the payment mode.
The employer will need to pay the advance contribution for 6 months.
Step 5: Registration Letter
On the successful payment of six months advance contribution, the system generated Registration Letter (C-11) is sent to the employer which will contain a 17 digit Registration Number by the ESIC department.
The Registration Letter (C-11) is a valid proof of registration of the employer.
Documents Required for ESIC Registration
Since the procedure for registration is online, no physical documents are required to be submitted. The documents required while filling the online registration form are:
A registration certificate obtained either under the:
Factories Act, or
Shops and Establishment Act
Certificate of Registration in case of Company, and Partnership deed in case of a Partnership
Memorandum of Association and Articles of Association of the Company
A list of all the employees working in the Establishment
PAN Card of the Business Entity as well as all the Employees working under the entity
The compensation details of all the employees
A cancelled cheque of the Bank Account of the Company
List of Directors of the Company
List of the Shareholders of the Company
A register containing the attendance of the employees
Benefits of ESIC Registration
The benefits of registering under this scheme are varied. Some of them are:
Sickness benefits at the rate of 70% (in the form of salary), in case of any certified illness and which lasts for a maximum of 91 days in any year.
Medical benefits to an employee and his family members.
Maternity benefit to the women who are pregnant (paid leaves).
If the death of the employee happens while on work – 90% of the salary is given to his dependents in the form of a monthly payment after the death of the employee.
Same as above in case of disability of the employee.
Old age medical care expenses.
Returns Filed Every Year After the Registration is Finalised
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.
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