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Read this comprehensive guide by H&R Block to find out if your organisation needs to get ESIC registration and the registration process.

What is ESIC? How to get ESIC Registration?

Last Update Date : September 27, 2018

Employees State Insurance is an integrated measure of social insurance. It is essentially risk pooling which means spreading of risks evenly among a large number of contributors to the program. Insurance is the transference of risks from individuals or corporations who cannot bear a possible unplanned risk to a market/institutions who can bear these risk.
Let us now learn in depth about the same in this guide by H&R Block.

What is ESI Registration?

Employees State Insurance Scheme or ESI defined in the Employees State Insurance Act, 1948 is an integrated measure of Social Insurance and is specially designed to accomplish the task of protecting employees. This ESI scheme is administered and regulated by an autonomous, self-financing social security and labour welfare organization named ESIC, strictly as per the rules and regulations given in the Indian ESI Act of 1948.
It was the first major legislation on comprehensive social security for workers in Independent India based on the principle of “Pooling of risks and resources”.

ESI Registration is useful for both the employees and employer. It provides monetary as well as medical benefits to the employees as it is an integrated need based social scheme. The registration under ESI scheme is regarded as a statutory responsibility of every concerned employer entity, engaged in any economic field. Keeping stride with the process of industrialisation, the Scheme today stands implemented at over 843 centres in 33 States and Union Territories.

Who is Eligible to Register under ESI?

As per the Government notification, the Act is applicable to;

  • Non-seasonal factories employing 10 or more persons,
  • Further, the Scheme has been extended to
    • shops,
    • hotels,
    • restaurants,
    • cinemas including preview theatres,
    • road-motor transport undertakings
    • and newspaper establishments employing 10 or more persons.
  • The Scheme is also applicable to Private Medical and Educational institutions employing 10 or more persons in most of the States/Union territories.
  • The wage limit under the act was Rs 15,000 per month up to December 2016 and therefore increased to Rs. 21,000 per month from 1st January, 2017.

Minimum Number of Employees Required for Registration of Establishment

Sr No. State Minimum employees to be registered Sr No. State Minimum employees to be registered
1

 

Himachal Pradesh 20 19 Delhi 10
2 Jammu & Kashmir 20 20 Karnataka 10
3 Jharkhand 10 21 West Bengal 10
4 Kerala 10 22 Andhra Pradesh 10
5 Madhya Pradesh 10 23 Arunachal Pradesh 20
6 Maharashtra 20 24 Assam 20
7 Manipur 20 25 Bihar 10
8 Meghalaya 20

 

26 Chhattisgarh 10
9 Mizoram 20 27 Goa 20
10 Nagaland 20 28 Gujarat 10
11 Orissa 10 29 Haryana 10
12 Pondicherry 10 30 Uttrakhand 10
13 Punjab 10 31 Chandigarh 20
14 Rajasthan 10 32 Daman and Diu 20
15 Sikkim 20 33 Dadra and Nagar Haveli 20
16 Tamil Nadu 20 34 Andaman and Nicobar 20
17 Tripura 10 35 Lakshadweep 20
18 Uttar Pradesh 20 36 Outside India 20

What is the Rate of Contribution, Period and Benefit?

Rate of Contribution

Particulars Particulars Total
Employee’s share – 1.75 % Employer’s share- 4.75 % 6.5 %

Rate of Contribution in Newly Implemented Areas for the Initial 2 Years

Particulars Particulars Total
Employee’s share – 1 % Employer’s share- 3 % 4 %

Contribution Period and Benefit Period

Contribution Period

 

Benefit Period
April to September January to June
October to March July to December

What are the Benefits of ESI Registration?

ESI registration being mandatory for a specified class of wage earners, earning less than or equal to Rs 21,000 per month envisages following social security benefits:

Medical benefit: The responsibility of medical benefit depends on the state government. There are generally three types of medical benefits as shown in the table below:

TYPES NATURE OF PROBLEM PROVIDED AT

 

Primary

 

Basic Ailments ESIS dispensary/Insured medical practioners
Secondary

 

Basic hospitalization including surgeries ESIS hospital
Tertiary (SST)

 

Higher treatment and Surgeries ESIS hospital or ESIS hospitals
  • Full medical care is provided to an Insured person and his family members from the day he enters insurable employment i.e. from 1st day of employment.
  • There is no ceiling on expenditure on the treatment of an Insured Person or his family member.
  • Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs 120.
  • There are certain conditions for super specialty treatment as prescribed below;
    • Continuous employment for 2 years on date of diagnosis
    • At least 156 days of Contribution paid during immediate 4 CP.
    • Should be eligible for Sickness Benefits in at least 2 benefit Period.
    • Treatment would be cashless after getting a referral letter from Medical Superintendent ESIS Chikalthana Hospital.
    • In an emergency can be directly taken to any of the Tie-up Hospital for treatment and the formality of Referral can be taken later.

Sickness Benefits: Sickness benefits are usually in the form of cash given to the insured person in the event of sickness resulting in absence of work and duly certified by a certified Insurance Medical Officer.

Name of the Benefits Contributions Duration Rate
Sickness 78 days Contribution to be paid in a contribution period of 6 months Up to 91 days in 2 consecutive Benefit period

 

70 % of average wage
Enhanced Sickness 78 days Contribution to be paid in a contribution period of 6 months 07 Days for Men

14 days for Women

 

100 % of wage
Extended Sickness For 34 specified long term disease.

2 year Continuous Employment and 156 days Contribution in 4 Contribution Period.

 

Maximum up to 730 days 80 % of wage

Disablement benefit: Disablement benefit is payable to insured employees suffering from physical disablement due to employment injury or occupational disease.

Note: An insured person should be an employee on the date of the accident.

Name of benefits Contributory condition Duration Rate
Temporary disablement DAY 1 of Insurable Employment for employment Injury cases

 

As long as Temporary disablement last

 

90 % of last wages
Permanent disablement DAY 1 of Insurable Employment for employment Injury cases

 

For whole life As per loss of Earning Capacity calculated by Medical Board

 

Dependent Benefit: Dependent benefit (Family pension) becomes payable to dependents of a deceased insured person where death occurs due to employment injury or an occupational disease.

Name of benefits Contributory condition Duration Rate
Dependent Benefit DAY 1 of Insurable Employment for employment Injury cases

 

Ø  For Widows whole life or re-marriage.

Ø  Son up to age of 25 years

Ø  Daughter till marriage

Ø  Widowed mother dependent whole life

 

90 % of wages subject to the defined ratio of dependents.

 

Maternity benefit: Maternity benefit is payable to insured women in case of confinement or miscarriage or related sickness from pregnancy.

Name of benefits Contributory condition Duration Rate
Maternity Benefit 70 days contributions to be paid by the insured women in 2 previous contribution periods Up to 26 Weeks,

1 month more for sickness arising out of pregnancy duly certified by the doctor

 

100% of wages

Other Benefits

Name of benefits Contributory condition Duration Rate
Confinement Expenses

 

Insured wife/Wife of Insured person is eligible if confinement takes place at location where ESI Hospital is not available For 2 confinement only

 

Rs. 5000/- per case
Funeral Expenses From Day 1 of Insurable employment

 

For funeral expenses on death of Insured person

 

Maximum of Rs 10000/-

 

Unemployment allowance(Rajiv Gandhi Shramik Kalyan Yojana) For Loss of Employment due to ;

Closure of Factory/Retrenchment/Permanent Disablement due to Non-Employment Injury.

Contribution to be paid for minimum 2 years

 

Maximum 24 month 0-12 Months:

50 % of Last Average Wages

 

13-24 Months:

25 % of Last Average Wages

Vocational Rehabilitation: Vocational rehabilitation benefits can be availed in case of disablement in insured persons under 45 years of age with 40% or more disablement.

Physical Rehabilitation: In case of physical disablement due to employment injury.

Old Age Medical Care: For Insured Person retiring on attaining the age of superannuation or under VRS/ERS and person having to leave service due to permanent disability insured person & spouse on payment of Rs 120 per annum.

Documents Required for ESI Registration

  • Registration Certificate or License issued under Shops and Establishment Act or Factories Act, if available.
  • Memorandum and Articles of Association or Partnership Deed or Trust Deed, depending upon the constitution of the ownership of the establishment.
  • Certificate of commencement of production and/or Registration No. of CST/ST, if available.
  • Month wise employment position, salary etc.
  • List of Partners or Directors
  • PAN Card and Address Proof of the Factory/Firm/Establishment
  • Evidence in support of the date of commencement of production/business
  • Copy of bank statement

What is ESI Registration Procedure?

  • ESI registration for both the employer and employee is completely online without any manual intervention or approval.
  • The employer is required to submit the information in the online screens (SCREEN SHOTS ENCLOSED) and on successful submission of the information; the code number is generated automatically and displayed to the employer.
  • A copy of the Registration letter(C-11) can be printed from the link provided. A copy of registration letter (C-11) along with the user credentials (user ID and password) are also sent automatically to the email of the employer.
  • The Registration (C-11) is a computer generated letter and is not required to be physically signed by issuing authority and can be used by the employer as a valid proof of registration.
  • Once the code number is generated and C-11 is sent to the email address of the employer, the employer can log on to the website of the ESIC (www.esic.in) and can perform all the online activities.

The procedure is explained below for registering as a new unit ;

  • STEP 1: Firstly, login to ESIC homepage- www.esic.in, and click on “click here to login”
  • STEP 2: You will be directed to a page shown below; then select sign up
  • STEP 3: Once directed to the Sign up page, enter the required details like Company Name, Principal Employer Name, State & region, Email Address and click on submit.
  • STEP 4: Now, an email will be send to you after successful sign-up along with login credential.
  • STEP 5: Once, you receive the email again login to www.esic.in with the login credential
  • STEP 6: Now, select new employer registration
  • STEP 7: Once done with the selection of new employer registration, you will be directed to a new page where you have to select the type of unit based on your situation.
  • STEP 8: You can now fill the details in form 01(Employers registration Form), check the declaration and click on submit as shown in the image below;
  • STEP 9: On the last screen, when you check declaration box, system populates Advance Challan details now Click on submit;
  • STEP 10: you will be directly to payment link, click on OK.
  • STEP 11: You can now select online or offline mode as per your convenience, Advance Challan will be generated and click on continue to proceed further to the payment gateway and make the payment accordingly.

NOTE: Kindly note the challan number for further references.

  • STEP 12: Lastly you will be payment successful confirmation receipt.

After the registration ESI Returns have to be filed twice a year. The following documents are required for the filing of the returns:

  1. Register of Attendance of the Employees
  2. Form 6 – Register
  3. Register of wages
  4. Register of any accidents which have happened on the premises of the business
  5. Monthly returns and challan

Requirements of Compliance after ESI Registration

Companies under ESIC coverage mandatorily need to file the annual return, showing the changes if any made in the previous year. You must also submit the return of contributions enclosing a copy of all ESI contributions paid once every six months. Furthermore, Organizations under ESIC Registration must maintain the following records:

  • Attendance Register
  • Wages Register
  • Form-6 Register
  • Accident Register
  • Inspection Book
  • File containing all monthly challan& returns submitted

Penalties for Non-payment or Delayed Payment

In case the employer does not comply with the law, he/she might face several consequences as stated below as per section 45. The Corporation may levy and recover damages under Reg. 31C at the following rates, not exceeding the amount of contribution payable for default or delay in payment of the contribution.

  • Less than 2 months- 5 %
  • 2 to 4 months -10 %
  • 4 to 6 months -15 %
  • 6 months and above -25 %
  • Criminal and Civil Prosecution will be initiated under Sec 85 (a) to (g) which might attract fine and imprisonment up to 3 year maximum.

People also ask

Q. Is it mandatory for employers to register under the ESI?

A. Yes, this is a mandatory requirement for every employer who comes under this act to register their unit/Factory/Establishment.

Q. What is the procedure for the registration of an employer?

A. An employer can apply for FORM 01 within 15 days after the act becomes applicable to an establishment or a unit

Q. What is the procedure for the registration of an employer?

A. An employer can apply for FORM 01 within 15 days after the act becomes applicable to an establishment or a unit

Q. What is the ESI Code Number?

A. This is the 17-digit unique identification number that is allotted to every registered establishment. This number gets generated through the ESIC portal on the submission of required information by the employer or it is generated on receipt of a survey report from the Social Security Officer.

How can H&R Block help you?

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