Overview

ESI, or the Employees State Insurance Scheme, is a social security initiative by the Indian Government under the ESI Act of 1948. Managed by the Employees State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labour and Employment, this scheme provides protection to employees against death, disablement, sickness, maternity, and injury related to employment. 

To receive medical care and other benefits, employees must be registered under the scheme. The ESI Scheme is self-financed, with employers and employees contributing a percentage of wages monthly. Contact us! Our professionals can help you get ESI registration, allowing you to focus on your business while we handle the details.

Benefits of ESI Registration in India

There are several benefits of ESI to the employer and employee, some of them are as follows: - 

For Employers:

1. Legal Compliance: Ensures compliance with legal requirements under the ESI Act, avoiding penalties and legal issues.

2. Employee Welfare: Demonstrates commitment to employee welfare, enhancing the company's reputation and employee loyalty.

3. Financial Relief: In case of employee sickness, disability, or maternity, ESI provides financial support, reducing the employer's burden.

4. Boosts Morale: Providing ESI benefits boosts employee morale and productivity as they feel secure about their health and financial well-being.

5. Tax Benefits: Contributions to ESI are deductible as business expenses under the Income Tax Act, reducing the taxable income.

For Employees:

1. Medical Benefits: Access to comprehensive medical care for the insured employee and their family members without additional costs.

2. Sickness Benefits: Cash compensation for loss of wages due to sickness certified by a medical practitioner, up to 70% of wages for a maximum of 91 days in a year.

3. Maternity Benefits: Paid maternity leave for up to 26 weeks for female employees, employers are required to contribute their wages for 70 days in the preceding 2 contributions period. 

4. Disability Benefits: Monthly payments in case of permanent or temporary disablement due to employment-related injury or illness.

5. Dependents' Benefits: Financial support to dependents in case of the employee's death due to employment-related injury or disease.

7. Funeral Expenses: An additional amount of 15,000/- to the dependents or the person who performs the last rites of the deceased insured employee.

Entities Covered Under ESIC

As per the Section 1(5) of the ESI Act, these entities are covered under ESI registration: -

• Private medical institutions

• Road motor transport organizations 

• Cinemas

• Shops

• Newspaper establishments which are not covered under Factory Act

• Hotels and Restaurants 

• Educational institutions 

• Medical institutions

• Contract and casual employees of Municipal Corporations or Municipal Bodies

When at all the above-mentioned establishments number of employees goes above up to 10 or more than 10, in that case the owner of such establishments is required to apply ESIC registration mandatorily.

It also applies to the following establishments under the central government employing 20 or more persons engaged in:

• Insurance business 

• Non-Banking Financial Companies (NBFCs) 

• Airport authorities 

• Port trusts 

• Warehousing establishments

What is the Eligibility for ESI Registration in India?

ESI registration is applicable when there are 10 or more employees or workers, but in some areas, ESI registration is also possibly applicable on the establishments, that have more than 20 employees. In order to complete ESI registration, the following eligibility criteria should be satisfied:

1. The business must be registered with the EPFO.

2. The total contribution of the ESI is 6.5% of the gross salary and further, it is divided as follows:

• 0.75% from employees’ side

• 3.25% from employers’ side

3. An employee, whose monthly salary is up to 21,000 INR can avail of this with the employer’s help.

4. For industrial sectors where there chances are high of health issues and injury to the employees along with the salary below 21,000 INR, it is mandatory to get ESI registration.

Required Documents for ESI Registration in India

Following are the some essential documents for successful ESI registration in India:-

Company/Establishment Details:

• Certificate of Incorporation (for companies), Partnership Deed (for partnerships)

• Memorandum of Association (MOA) and Articles of Association (AOA)

• GST Registration Certificate

• PAN Card of the business

• Proof of the establishment's address

• Cancelled Cheque of the Company

• List of shareholders and directors (if applicable) 

Employee Details:

• List of all employees working in the company

• Employee details, including wage information

• Employee's PAN card

• Employee's Aadhaar card

• Employee's Identity Proof

• Employee's Residential Address Confirmation 

Other Important Documents:

• Digital Signature Certificate (Class III)

• Registration Letter (C-11) - after registration

• Mobile Number and Primary Email ID of the company or its Director's email ID or mobile number 

Process for ESI Registration 

Steps for process of ESI registration is follows: -

1. Employer signup

2. Get user ID and password to login

3. Select unit type

4. Prepare application form

5. Upload documents and attach DSC

6. Pay advance or Submit

Compliances after ESIC Registration: 

• Maintaining the attendance register.

• Maintaining a complete register of wages for workers.

• Inspection book.

• Monthly return and challan within 15th of the succeeding month.

• Maintaining a register that records any accidents that happened on the premises.

Return to be Filed After ESIC Registration:

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

• Form-6 register

• Monthly returns and challans

• Attendance register of the employees 

• Register of wages 

• Register of any accidents which have happened on the premises of the business