Employee State Insurance (ESI) Registration
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.
This scheme is started for Indian workers. The workers are provided with a huge variety of medical, monetary and other benefits from the employer. Any Company having more than 10 employees (in some states it is 20 employees) who have a maximum salary of Rs. 15,000 has to mandatorily register itself with the ESIC.
Under this scheme, the employer needs to contribute an amount of 4.00% of the total monthly salary payable to the employee whereas the employer needs to contribute only 1.00% of his monthly salary every month of the year. The only exemption to the employee in paying his contribution is whose salary is less than Rs. 100/- per day.
Benefits of ESIC Registration
- Sickness benefits 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
- Medical Benefits to an employee and his family members
- Maternity Benefit to the women who are pregnant (paid leaves)
- 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
- Same as above in case of disability of the employee
- Funeral Expenses
- Old age care medical expenses
Documents required for ESIC Registration
- A registration certificate obtained either under the Factories Act or 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
- List of the Shareholders of the Company
- Register containing the attendance of the employees
Frequently Asked Questions
How the Scheme is funded?
The ESI scheme is a self financing scheme. The ESI funds are primarily built out of contribution from employers and employees payable monthly at a fixed percentage of wages paid. The State Governments also bear 1/8th share of the cost of Medical Benefit.
Is it mandatory for the Employer to do ESIC registration?
Yes, it is the statutory responsibility of the employer under Section 2A of the Act read with Regulation 10-B, to register their Factory / Establishment under the ESI Act within 15 days from the date of its applicability to them.
What is ESI Code registration number?
ESI code is 17 digit number allotted to employer. This Unique ESI code is generated by ESIC portal after submission of information and legal documents.
I am having branches do I need separate ESI code registration?
Yes. Sub-code registration can be take for sales, branch office etc. Where establishment located in same state or different state.
Do ESI need to calculated on over time paid to employee?
In routine overtime is not a regular and continuous source of wages of employee. If overtime is considered in wages then changes that employees will get removed from scheme for some time. Hence ESI calculation not applicable on Over time.
What is Medical Benefit to employee after ESI registration?
Medical benefit means the medical attendance and treatment to the insured persons covered under the Act and their families as and when needed. This is the only benefit provided in kind through the State Governments including Model Hospitals run by ESI Corporation (except in Delhi), and uniformly to all as per their requirement without linking it to their wages and contributions.
What is Salary / Wages limit to employee for Employee's State Insurance(ESI) benefit?
Salary / Wages less than Rs. 21,000 Per Month W.e.f from 01.01.2017. Hence employee drawing salary below Rs. 21,000 per month are eligible for ESI benefit.
What is Employee's State Insurance(ESI) Contribution rate ?
1. Employers Share is 4.75%.
2. Employees share is 6%. Total come to 6 % for Employee's State Insurance(ESI) Contribution rate.