ESIC Scheme – Employee State Insurance Corporation

ESIC Scheme – Employee State Insurance Corporation

Last Updated : Nov. 22, 2022, 3:28 p.m.

The full form of ESIC is Employee State Insurance Corporation. It is an autonomous organisation under the Ministry of Labour and Employment, Government of India, that manages Employee State Insurance (ESI). The ESI scheme was meant for Indian workers with a diverse range of monetary, medical, and other benefits under the Employee State Insurance Act. The employer and the employee make contributions towards the ESI scheme.

ESIC Registration Eligibility

Any non-seasonal organisation housing more than ten employees with a maximum salary of Rs. 21,000 needs to compulsorily register itself with the ESIC within 15 days of its operation. As per this scheme, a total of 3.25% of their total monthly salary needs to be contributed by the employers, while the employee needs to contribute only 0.75% of the monthly salary. The employees earning less than Rs. 176/- per day are exempted from the ESI contribution.

Entities Covered Under ESIC

According to the Government notification, the following entities are covered under Section 1(5) of the ESI Act:

  • Hotels or restaurants engaged only in sales
  • Shops
  • Cinemas
  • Newspaper establishments are not covered under the Factory Act
  • Road motor transport establishments
  • Private educational institutions
  • Private medical institutions

When ten or more persons are employed by the establishments, as mentioned above, the employer of the establishment must mandatorily register it with the ESIC.

ESIC Registration Process Online

Previously, the ESIC registration process was manual, but currently, it has been shifted completely online to the ESIC portal. The steps involved in the ESIC registration process are given below:

Step 1: Log in to the official portal of the ESIC

An employer needs to register himself on the ESIC portal. They must follow the steps given below:

  • They must click on the ‘Employer Login’ option on the home screen to register themselves on the ESIC portal.
  • Click on the ‘Sign Up’ button on the next page.
  • After the ‘Sign up’ button is clicked on, the employers must fill in the information and submit the form.

Step 2: Confirmation Mail

After completing the signup form and submitting it, the employer will receive a confirmation email on the registered email address and phone number.

The email contains the information regarding the username and password for registering as an employee or employer under the ESIC scheme.

Step 3: Employer Registration Form-1

After email confirmation, follow the steps mentioned below:

  • Click on ‘Employer Login’ on the home screen to log in to the ESIC portal and enter the username and password received in the email ID. You will be redirected to the ‘New Employer Registration’ option page.
  • Select the ‘New Employer Registration’ option and select ‘Type of Unit’ from the dropdown list. Finally, click on ‘Submit’.
  • After the ‘Employer Registration – Form 1’ appears, the details must be filled in by the employer.
  • The employer needs to enter the information regarding the employer’s unit on the ESI Form-1, such as the employer’s unit, establishment details, and employee details.
  • Once the employer fills up the completed form, they must click on the ‘Submit’ button.

Step 4: Payment for Registration

After the ESI registration form-1 is submitted, you will have to take the following steps:

  • The ‘Payment of Advance Contribution’ page will open up. Here the employer must fill up the amount to be paid and select the payment mode.
  • An advance contribution for six months needs to be paid by the employer.

Step 5: Registration Letter

Once the advance payment for six months is successfully completed, the employer is sent the Registration Letter (C-11) generated by the system. It contains a 17-digit registration number that is assigned by the Employee State Insurance Corporation department. It is a valid proof of the employer’s registration.

Documents Needed for ESIC Registration

As the process for registration is online, there is no need to submit any physical documents. The following are the documents required:

  • Certificate of Registration obtained under either the Shops and Establishment Act or the Factories Act.
  • Certificate of establishment incorporation such as:
    • For a company: Company Registration Certificate
    • For a partnership firm: Partnership deed
  • Articles of Association and Memorandum of Association of the company
  • GST certificate of the establishment
  • Address proof of the establishment: You can submit any one of the following as the address proof:
    • Rental agreement of the land where the establishment is located.
    • Utility bills like gas connection bills, electricity bills, or telephone bills of the establishment (not beyond three months).
    • Property tax of the land where the establishment is located.
  • A list of all the employees employed by the company.
  • PAN Card of all the employees working in the establishment as well as of the business establishment itself.
  • Compensation details of all the employees.
  • A cancelled cheque from the bank account of the company
  • List of the company’s directors and shareholders.
  • A register with the employees’ attendance records.

Benefits of ESIC Registration

Following are some of the benefits of registering under the ESIC scheme:

  • In case of any certified sickness lasting for around three months in a year, the employee will be entitled to a sickness benefit at the rate of 70% (in the form of salary).
  • Maternity benefits to pregnant women in the form of paid leaves.
  • Medical benefits to the employee as well as his family members.
  • If the employee passes away while at work, 90% of the salary is transferred to his dependents as a monthly payment after his death.
  • For the disability of the employee, the same as above is applied.
  • Old age medical care expenses
  • Funeral expenses

Compliances After ESIC Registration

Following are the rules with which the establishment needs to comply after registering under the ESIC:

  • Maintenance of the attendance register
  • Monthly return and challan within the succeeding months’ 15th
  • Inspection book
  • Maintaining a complete register of worker wages
  • Maintaining a register with a record of any accidents that may happen on the premises.

Frequently Asked Questions

1. Is it compulsory for employers to register under the ESI?

Yes, all the employers covered under the ESI Act must compulsorily register themselves under the ESI scheme. The establishments or factories with more than 10 or 20 employees with a maximum salary of Rs. 21,000 per month are covered by the ESI Act.

2. What if the contribution from the salary of an employee is not paid on time?

When an employer fails to pay the contribution he needs to pay towards the ESI Act, he will be liable to pay a simple interest at the rate of 12% pa for each day of delay or default in payment.

3. How to check the ESI registration of an employee online?

An employee of an organisation registered with the ESIC can check their registration details using the insurance number assigned to him at the time of the ESIC registration. After visiting the ESIC portal, the employee must click on the ‘Insured Person Login’ option and submit the captcha code and user number. The user number is the same as the employee’s insurance number.

4. What is the ESI Code number?

It is a 17-digit unique identification code assigned to every employee of an organisation registered with the ESIC. It is generated using the ESIC portal after the employee’s details have been submitted by the employer.

5. How many employees are needed for ESI registration?

ESI registration applies to all entities that employ more than ten employees with a maximum salary of about Rs. 21,000.

6. What is meant by insurance number?

The ESI scheme assigns a unique identification number to every employee. This number is also called the insurance number and is utilised for acquiring benefits provided under the ESI scheme.

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