ESIC Registration – Process Benefits explained: this guide covers what ESIC Registration – Process Benefits means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Employee’s State Insurance (ESI) is a self-financing arrangement for Indian workers that covers health insurance and social security. ESI works as an independent corporation and comes under the Ministry of Labor and Employment in India. The ESI Corporation thus manages the funds controlled by the guidelines and regulations of the ESI Act. 1948. This act monitors the provision of cash and medical benefits to employees and their families through their complete network of hospitals and dispensaries all over India.
Benefits of ESI Registration for both Employer & Employee
Employees registered under the ESIC are eligible for a series of benefits. Some of the benefits are pointed below -
1. Sickness reimbursements at the rate of 70% (in the form of salary), in case of any certified illness certified and which lasts for a maximum of 91 days in any year.
2. Medical, surgical and obstetric treatment benefits to an employee and his family members
3. Maternity benefit to the women who are pregnant (paid leaves)
4. If the death of the employee happens while on work – 90% of the salary is given to his dependents every month after the death of the employee
5. Supply of medicines, super specialty consultations.
6. Same as above in case of disability of the employee
7. Funeral expenses
8. Old age care medical expense
Organizations Covered Under ESIC -
“As per the government notification dated Sec 1(5) of the ESI Act the following entities are covered:
1. Shops
2. Restaurants or Hotels only engaged in sales.
3. Cinemas
4. Road Motor Transport Establishments
5. Newspaper establishments (which is not covered under the factory act)
6. Private Educational Institutions
Documents Required for ESIC Registration
The documents required for the registration are –
1. A registration certificate obtained either under the:
a. Factories Act
b. Shops and Establishment Act
2. Certificate of Incorporation in case of Company or LLP, and Partnership deed in case of a Partnership
3. Memorandum of Association and Articles of Association of the Company
4. A list of all the employees working in the Establishment
5. PAN Card of the Business Entity as well as all the Employees working under the entity
6. The compensation details of all the employees
7. A canceled cheque of the Bank Account of the Company
8. List of Directors of the Company
9. List of the Shareholders of the Company
10. A register containing the attendance of the employees
After collecting all the above-mentioned documents, the following procedure is to be followed for the registration of the ESI:
a. Form No – 1 (Employers Registration Form) is to be downloaded and filled.
b. After downloading the PDF version of the form and filling it, it has to be submitted on the website itself along with the above-mentioned documents.
Wage Limit under ESI Registration:
Employees earning 21,000 INR per month or less are applicable for ESI contribution. Employees with higher wages are exempt.
Note: The wage limit for Employees with ‘Disability’ is 25000INR per month.
Employee contribution: 0.75% of total salaries.
Employer Contribution: 3.25% of total wages.
What is the process after the form verification?
Step 1: After verification of the form, the government will issue a 17 digits unique number.
Step 2: The employee who is registered under this scheme will provide the employer with the filled form and photographs of his family members as a part of the process of registration and he will get an ESI card after registration.
Step 3: Any change in the Company or its employees will be intimated to the ESIC.
How many returns are filed every year after the registration is finalized?
After the registration ESI Returns have to be filed twice a year. The following documents are required for the filing of the returns:
1. Register of Attendance of the Employees
2. Form 6 – Register
3. Register of wages
4. Register of any accidents which have happened on the premises of the business
5. Monthly returns and challans