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.
What are the Conditions for eligibility criteria?
- Under Sec2 (12) of the ESI Act, 1948 any individual working in the non-seasonal factory with more than 10 employees.
- Employees working in sectors such as hotels and restaurants, newspaper establishments, Road-motor undertakings, Cinemas and preview theatre and Private Educational and Medical institutions with a strength of more than 20 employees.
- The existing wage limit of the employee is Rs.21, 000 per month and if the employee has any disability, the wage limit for coverage is Rs. 25,000 per month.
- To receive the social security benefits of the ESI scheme employees should drawn wages up to Rs. 10,000 per month.
Which Entities covered under ESI?
Under the Employees ‘State Insurance Act, 1948, many establishments are eligible for registration as long as have the required number of employed in that state. The entities covered are:
- Restaurants or hotels only engaged in sales
- Road Motor Transport Establishments
- Newspaper establishments(which are covered under the factory act)
- Private Educational Institutions
- Roadside motor transport establishments
What are the Documents required for the ESIC Registration?
- A registered certificate obtain either under the :
1. Factories Act
2. 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
- Register containing the attendance of the Employees.
What is the ESIC Registration Process?
The ESI Registration is completely online process.
1. Login to ESIC Portal: To register as an employer under the ESI Act, go to esic.in and on opening of home page select ‘Click here to Login’.
2. Next Sign up option will be available , fill the details as required
- Company name
- Principle employer name
- State, Regions
- Email ID
- Phone No.
After filling the details, check the box next to notification ‘ Please confirm your establishment/factory under exclusive Labour Contract/Man Power Suppliers, Security Agencies, Contractors Labour categories. If not please register through Common Registration Link for ESI/EPFO’, and click on the submit button.
3. After the submitting the details for sign up, you will receive an email from ESIC Insurance team. This email would contain username and password details that will be used for registering as an employer and employee under the ESIC scheme.
4. After receiving the login credentials, access the ESIC portal again and enter login details at the User Login Page, then enter username, password as received in the email and press login.
5. After login into account, a new page ‘New Employer Registration ‘ Link appear , click and proceed further, New Registration Page will be displayed , now select the type of Unit(Factory, shop establishment etc) and submit the same.
6. On submitting the type of Unit, Employer Registration – Form 01 will appear , this form is divided into multiple parts , which include:
- Unit Details: This the first section , which required the following details:
- Name of the Unit(Factory/Establishment)
- Complete postal address of the factory / establishment including sate, district, phone no., mobile no. fax no., email id.
- Police Station
- Name of town /revenue village, taluk/tehsil, revenue demarcation / hubast no., Municipality.
- Whether the building /premises of factory/ establishment is owned or hired.
- If hired or there is a change in the name of the unit/ ownership , mention the same, further provide the ESI code no. if covered earlier, the date from which the earlier factory/establishment closed down and upload the copy of agreement or relevant deed containing terms and conditions under which property acquired /taken on lease.
- Once done, click next to proceed further.
- Next Section is Employer Details
- Details of all the operational bank accounts such as account no, bank name, MICR code, IFSC code of the Bank/ Branch.
- Income taxes PAN no. , income tax ward /circle/area.
- Is your factory /establishment a multinational-yes/no, exact nature of work/business carried on, category, whether the activity being carried out in your factory/establishment is considered hazardous process.
- Date of commencement of factory/establishment.
- Whether registered under any of the acts such as factories act, shops and establishment act, or any other , license no., date and licensing authority, Maximum no. of employees that can be employed per day as per the license.
- Next Factory/Establishment Details :
- Date since power is used for manufacturing process as per section 2(k) of the factory act.
- Whether License is issued under section 2(m)(i) or 2(m)(ii) of the factories act,1948.
- Power connection details such as connection no., sanctioned power load and issuing authority
- Constitution of ownership
- Other details such as father’s name, age, permanent residential address of the manager declared under the factories act etc.
- Next are Employees details
- Work/business carried out through contractor/ immediate employer
- Nature of business
- EPF code number
- Issuing authority
- of employees employed for wages directly and through immediate employers on the date of application.
- First date since when 10 or 20 or more coverable employees under ESI act were employed for wages.
- Total wages paid in the preceding month.
- Employee declaration form.
- Branch office and inspection division.
- After filing the above details, click on the declaration for the correctness of the information and submit.
- Pay Initial Contribution: After submitting all the details in the ‘Employee details’ section, you will be directed to Payment of Advance Contribution page, here by clicking on the ‘Pay Initial Contribution Link’ you will be directed to the ‘Advance Contribution ‘Page where you are required to fill the Amount to be paid filed and select the payment mode (Online or Offline) to pay advance contribution for 6months. After filling details click on the Submit button, note the challan no. and press ‘Continue’ to make payment.
v Registration Letter C-11
On making the payment, you as an employer would receive a system generated registration letter on registered email ID once the challan gets realized from the bank, C-11 is a computer generated letter and does not need any signatures.
It is used as a valid proof of registration of your unit under the ESIC Act.
What are the benefits of ESIC Registration?
ESI Registration ensures that employees enjoy the following advantages under the ESI:
- Medical Aid: From very first day of employment, registered ESI members and their family are entitled to enjoy the benefited of complete medical care and Insurance.
- Maternity Aid: Pregnant women are entitled to maternity benefits upto twenty six weeks. This period can be extended by 30 days on medical advice. To qualify for maternity benefits, employers are required to contribute their wages for 70 days in the preceding two contributions periods.
- Disablement benefits: Disabled employees can get 90% of their monthly salaries as disablement benefits.
- Sickness Benefits: Absence from work during the illness can be taken for a maximum of 91days year along with 70% of the monthly wages.
- Dependent Benefits: Disabled employees can get 90% of their monthly salaries as disablement benefits.
- Sickness Benefits: Absence from the work during illness can be taken for a maximum of 91 days per year along with 70% of the monthly wages.
- Funeral Expenses: The family of the deceased employee is entitled to an additional amount of Rs. 10,000 towards funeral expenses.
v How many returns are filed every year after the Registration ?
After the registration ESI Returns have to be filed twice a year, and 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.
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.
Author- CS Aakansha Negi and can be contacted at [email protected]