The Employees State Insurance (ESI) is said to be one of the most popular social security schemes brought into the force by the Central Government after the independence of India. In this, it is mandatory for almost all the private limited companies to get themselves registered under the ESI Act, 1948. It is a need-based social insurance welfare scheme incorporated under the said ESI Act, in order to assure better medical care to the employees, workers and their immediate dependants.
What is Employee State Insurance (ESI)?
Employees State Insurance (ESI) is currently managed by the Employee State Insurance Corporation (ESIC) which is said to be an autonomous body made by the law under the Ministry of Labour and Employment (MLE). This scheme was started for Indian workers, they are provided with a huge variety of medical, monetary and other benefits from their employer.
Under the said scheme, the employers are required to contribute an amount of 4.00% of the total monthly salary payable to the employee whereas the said employee 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 to those whose salary is less than Rs.100/- per day.
What is ESI Registration?
ESI is a vast social security scheme specially designed to completely accomplish the task of providing social protection to employees in the organised sector against any uncertain events of sickness, maternity, disablement and death due to injury caused during the course of their employment and to provide medical care to the insured employees and their dependents.
The scheme provides complete medical care to the employees registered under the scheme during their period of incapacity for recovering health and working capacity. It also provides monetary assistance to completely compensate for the loss of wages during their said period of absence from work due to their sickness, maternity, and any employment injury.
Any company which is having more than 10 employees (in some states it is 20 employees) who have a maximum salary of Rs.15000/- are required to mandatorily apply for ESI registration within the said 15 days of the ESI Act, 1948 actually becoming applicable on them.
Documents Required For ESI Registration In India
To be submitted by Employer:
- Registration Certificate or Licence issued under Shops and Establishment Acts or Factories Act;
- Address Proof: Latest Rent receipt of the premises you are occupying indicating the capacity in which the premises are occupied, if applicable;
- Latest building Tax/Property Tax receipt (Photocopy);
- Memorandum and Articles of Association/Partnership Deed/Trust Deed depending on the entity that is applying for registration;
- Photocopy of certificate of Commencement of production and/or Registration No. of CST/ST (or GST once it becomes applicable);
- Copy of PAN Card;
- Evidence in support of the date of commencement of production/business/first sale (e.g. Copy of First Invoice);
- Month-wise employment position, salary, etc. ;
- Copy of bank statement.
To be submitted by Employees:
- Family Photo in Duplicate.
Procedure For ESI Registration
The following procedure is followed to obtain an ESI registration in India:
- Getting ESI Registration: Companies or Entities must firstly get themselves registered within 15 days of the Act becoming applicable on them by particularly submitting an Employer’s Registration Form i.e. Form 1 to the said Regional Office.
- Obtaining Code Number: A 17-digit identification number called as the code number will be provided, which must be used in all correspondence relating to the said scheme, Form 3 must also be duly submitted along with the Form 1.
- For Employees: Particularly at the time of their joining the insurable employment, the said employee is required to fill in a Declaration Form i.e. Form1 and also submit two copies of their family photo to the said employer, which then must be submitted to the said ESI Branch Office by their employer.
- Insurance Number: The said employee will then be allotted an insurance number for the purpose of his/her identification under the said scheme.
- Temporary Identity Card: The said employee later will be issued with a temporary identity card for availing their medical benefit (if any) for a duration of three months.
- Permanent Photo Identity Card: Thereafter, he/she (employee) will be provided with a permanent photo identity card.
Entities covered under ESIC
The below-mentioned establishments if employing 10 or more persons altogether demands ESI coverage:
- Hotels or restaurants not having any manufacturing activity, but only providing service;
- Roadside Motor Transport Establishments;
- Newspaper establishments;
- Private Educational Institutions and Medical Institutions.
In some said states the minimum employees required for the ESI coverage is for 20 or more persons. Also, some said State Governments have not extended this particular scheme to hereby include Medical & Educational Institutions.
Benefits Of Obtaining ESIC Registration
The benefits of registering under the ESIC scheme include the following:
- 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 is pregnant (paid leaves);
- If the death of the employee happen while on work, 90% of their salary is given to his/her dependents every month after the death of the said employee;
- Same as above in case of disability of the employee;
- Funeral expenses;
- An old age care medical expenses;
Employees State Insurance Scheme provides health protection and income preservation in unforeseen contingencies like sickness, disablement, death due to employment injury and other issues that need medical aid such as maternity.
ESIC has played a significant role in providing social security millions of workers in the organized sector. LetsComply is the one-stop solution for all kinds of documentation needs and online ESI registration. To know more, call us at +91-9717070500 or send an email at firstname.lastname@example.org.