Expert ESI Registration for Comprehensive Employee Welfare
Enhance employee welfare with expert ESI registration. Simplify enrolling your business and employees under the ESI Act, ensuring comprehensive medical and financial benefits.
* Excluding Govt. Fees
Meaning
ESI registration refers to the process of enrolling a business establishment and its employees under the Employees’ State Insurance (ESI) Act, 1948. This Indian social security legislation aims to provide medical and financial benefits to workers in factories, businesses, or other entities that employ 10 or more people. Employee who have a maximum basic wage limit of Rs. 21,000 per month are also eligible to apply for ESIC.
Employers covered by the ESI Act are mandated to register with the ESI Corporation. The primary purpose of this registration is to ensure that employees receive the various benefits stipulated in the Act. These benefits include medical care, sickness benefits, maternity benefits, disability benefits, and several other forms of assistance designed to support workers and their families in times of need.
Important Aspects
- Eligibility: The ESI Act mandates that employers with ten or more employees (twenty in some jurisdictions) must register themselves with the relevant authority.
- Contribution: The ESI programme is funded by contributions from both the employer and the employee. 3.25% of the employee’s salary is contributed by the company, and 0.75% is contributed by the employee. Monthly payments are provided for these donations.
- The registration process: To register for ESI, the employer must submit an application to the regional office of the Employees’ State Insurance Corporation (ESIC) together with the necessary paperwork. The application should include information like the name of the business, number of employees employed in the establishment and address of company. An ESI code number, a 17-digit unique identification number, is given after the application has been processed.
- Compliance: After registering, the employer must adhere to ESI Act requirements, including maintaining records, submitting recurring returns, and making timely contributions.
- Benefits: Employees who are protected by the ESI Act are entitled to medical coverage for both themselves and any dependents. This covers medical care, hospital stays, prescription drugs and professional advice. Certain cash rewards are also given in the event of sickness, pregnancy, disability or death.
Advantages to Employees
- Medical Services: Employees registered under the ESI scheme, along with their dependents, are entitled to comprehensive medical benefits. This includes access to medical care, hospitalization, specialist consultations, diagnostic procedures, and medications. The ESI program ensures employees receive high-quality medical services.
- Temporary Incapacity: In cases of temporary incapacity due to illness, employees are eligible for cash benefits. The ESI Act stipulates that a certain percentage of wages is paid as a cash benefit during the period of illness, providing financial support to employees during their recovery.
- Maternity Benefits: Female employees are entitled to substantial maternity benefits, which include paid leave, reimbursement for pregnancy-related medical expenses, and a financial benefit during maternity leave. ESI enrollment guarantees that women are adequately supported during this significant period.
- Disablement Benefits: If an employee suffers a permanent disability due to an injury or illness sustained at work, they are eligible for a lifetime pension. This provision ensures financial stability and support for employees affected by such unfortunate circumstances.
- Dependent Benefits: In the unfortunate event of an employee’s death during the course of their employment, their dependents are eligible for a monthly pension. This benefit provides crucial financial support to the family members of the deceased employee.
Advantages for Employees
- Legal Compliance: ESI registration ensures that employers adhere to the statutory requirements of the ESI Act. Failure to comply can result in significant penalties and legal repercussions.
- Employee Satisfaction: Providing ESI benefits demonstrates an employer’s commitment to the welfare and well-being of their employees. This commitment can lead to higher employee satisfaction, improved retention rates, and a positive work environment.
- Reduced Financial Burden: By offering medical and cash benefits through the ESI program, employers share the financial responsibility of employee healthcare costs. This not only alleviates the organization’s financial burden but also fosters stronger employer-employee relationships.
- Heightened Productivity: Access to medical facilities and financial assistance during illness or maternity enables employees to recover more quickly and return to work sooner. This access can significantly boost organizational productivity.
- Competitive Advantage: ESI registration is a valuable employee benefit that enhances the organization’s reputation as an employer of choice. It can be instrumental in attracting and retaining talented individuals who prioritize social security and healthcare benefits.
What is included in this
FAQs
Any non-seasonal factory or establishment with more than 10 employees (or 20 employees in some states) and where employees earn a maximum basic wage of Rs. 21,000 per month (Rs. 25,000 per month for persons with disabilities) must register under the ESI scheme. Registration with the Employees’ State Insurance Corporation (ESIC) is mandatory within 15 days of meeting the eligibility criteria. The ESIC registration applies to establishments with 10 or more employees (or 20 or more in certain states/regions) engaged in specific industries or activities. Small businesses without employees also have the option to register voluntarily for this scheme.
No, ESI registration is only required for employees earning a monthly salary of up to Rs. 21,000 (as of 2021). Those who earn more than this amount are ineligible for ESI benefits.
Typically, the following documents are required for ESI registration:
- Proof of address of the establishment
- Memorandum of Association
- Registration certificate (such as a certificate of incorporation or a partnership deed)
- PAN card of the establishment
- List of employees and their details
- Salary records of employees
- List of Shareholders and Directors
- Bank account information of the establishment
- Proof of identity of the authorised signatory
Noncompliance with ESI registration requirements may result in fines and legal repercussions. Employers may be required to pay the contribution amount plus interest, in addition to incurring penalties for non-registration and non-payment.
Yes, ESI registration can be cancelled under certain conditions, such as establishment closure or a decrease in the number of employees below the threshold. The revocation procedure involves submitting a request and supporting documentation to the relevant regional office.
The ESI code number is a unique 17-digit identification number allotted to every employee of a factory or establishment registered with the ESIC. The 17 digit number is generated using the ESIC portal after the employer has submitted their employee’s information.
To recognise each employee, the ESI scheme allots a unique identification number to every employee to recognise each employee. This number is called the insurance number and is used for obtaining benefits provided under the ESI scheme.
