The Indian government has implemented the Employee State Insurance (ESI) scheme, which is overseen by the autonomous Employee State Insurance Corporation (ESIC) under the Ministry of Labour and Employment.
This scheme aims to provide social security benefits to Indian workers, with both employers and employees contributing a percentage of the employee’s salary towards the ESI fund each month. The ESI scheme offers various medical, monetary and other benefits to covered workers.
Who needs ESIC Registration?
To be eligible for ESIC registration, non-seasonal factories or establishments with over 10 employees (or 20 employees in some states) earning a maximum salary of Rs. 21,000/- must register within 15 days of the scheme’s applicability.
Employers are required to contribute 3.25% of the total monthly salary payable to employees, while employees must contribute 0.75% of their monthly salary per year, with the exception of those earning less than Rs. 176/- per day who are exempt from paying their contribution.
Entities Covered Under ESIC
As per the government notification, under Section 1(5) of the ESI Act the following entities are covered:
- Shops.
- Restaurants or hotels engaged only in sales.
- Cinemas.
- Road motor transport establishments.
- Newspaper establishments (which is not covered under the Factory Act).
- Private medical institutions.
- Private educational institutions.
- When the above-mentioned establishments employ 10 or more persons, the owner/employer of the establishment must compulsorily register it with the ESIC.
Purpose of ESIC Registration
The purpose of ESIC (Employee State Insurance Corporation) registration is to provide social security to workers in India. Employers and employees contribute a percentage of the employee’s wages towards the ESI scheme every month.
By registering with ESIC, employers ensure that their employees receive a range of medical, monetary and other benefits under the ESI Act. ESIC registration is mandatory for any non-seasonal factory or establishment having more than 10 employees (in some states it is 20 employees) who have a maximum salary of Rs. 21,000/-.
ESIC Registration Process
The following steps are involved in the online registration process:
Step 1: Log in to the ESIC Portal
Employers must register themselves on the ESIC portal by clicking on the “Employer Login” option on the homepage.
Click on the “Sign Up” button on the next page.
Fill in the details on the sign-up form and submit it.
Step 2: Confirmation Mail
After submitting the sign-up form, the employer will receive a confirmation email containing the username and password details for registering as an employer and employee under the ESIC scheme.
Step 3: Employer Registration Form-1
Log in to the ESIC portal by clicking on the “Employer Login” option on the homepage and entering the username and password provided in the confirmation email. This will redirect to the “New Employer Registration” page.
Click on the “New Employer Registration” option.
Select the “Type of Unit” from the drop-down list and click on the “Submit” button.
Fill in the details on the “Employer Registration – Form 1”, including information about the unit, employer, factory/establishment and employees. Click on the “Submit” button when the form is complete.
Step 4: Payment for Registration
After submitting the ESIC registration form, the employer will need to pay the advance contribution for six months on the “Payment of Advance Contribution” page, which will open automatically. The employer can select the payment mode and fill in the amount to be paid.
Step 5: Registration Letter
After the successful payment of six months’ advance contribution, the ESIC department will send a system-generated registration letter (C-11) containing a 17-digit registration number to the employer. The registration letter is valid proof of registration.
What are the Post-Registration Compliances under ESI?
After an entity is covered under ESIC, it is obligated to comply with the mandatory guidelines as stipulated by the Act, which includes:
- Maintaining an attendance register
- Maintaining a complete register of wages for workers
- Maintaining an inspection book
- Submitting monthly returns and challans by the 15th of the succeeding month
- Maintaining a register to record any accidents that occur on the premises.
Final Thoughts
Employee State Insurance Corporation (ESIC) scheme is a social security initiative by the Indian government that provides a variety of medical, monetary and other benefits to workers. ESIC registration is mandatory for non-seasonal factories or establishments with more than 10 employees, who earn a maximum salary of Rs. 21,000 per month. The registration process for ESIC is completely online and involves steps such as employer registration, payment of advance contribution and receiving the registration letter.
