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ESIC Registration
What you need to Know
Employee State Insurance Corporation (ESIC Registration) is a self-financing social security and health care insurance scheme that provides medical benefits, sickness benefits, maternity benefits and other various benefits, such as funeral costs, free provision of physical aids, etc.
Employee State Insurance Corporation or ESIC Registration is a self-financing social security and health insurance scheme that provides medical benefit, sickness benefit, maternity benefits and various other Some of the benefits provided include covering funeral costs and providing free physical aids etc.
ESIC registration is required for any factory or business with 10 or more employees, regardless of their salary. All employees earning a monthly salary below Rs. 21,000 must pay ESI. This statutory scheme provides health and sickness insurance to employees earning less than Rs.21000
State government contributes 1/8th of the cost for medical benefits.
Who is required to register with ESIC
The following employers with 10 or more workers are covered by ESI.
- Shops
- Hotels and restaurants that are only involved in sales, with no manufacturing activities.
- Movie theaters, including preview theaters
- Road Motor Transport Establishments
- News paper establishments
- Private Educational Institutions: These include those run by individuals, trustees or societies, as well as Medical Institutions such as hospitals, nursing homes and diagnostic centers that are owned by corporations, joint sector, charitable trusts, private owners, or corporate, joint sector, trusts.
Contribution Rate to ESIC:
Currently the employee’s contribution to ESIC is 0.75% of their wages and that of the employer is 3.25%. The employee’s contribution rate towards ESIC (as of 01.07.2019), is 0.75 and the employers is 3.25
However this rate changes from time to time.
Period of Contribution and Benefit
Two contribution periods of each six-month duration are available, as well as two benefit periods of the same duration.
ESIC registration falls under the statutory responsibility for the employer of the factory. The ESI Act of 1948 makes it mandatory.
The Benefits Of ESIC Registration - Modified Content
Medical Benefit
ESIC covers the medical costs of a person and his dependents, including all medical and surgical procedures. His dependents, without limit, in ESI hospitals and dispensaries, including a supply medicine, ambulance service, and super-specialty consultation.
Disablement Benefit
ESIC pays 90% of an employee’s monthly wage for the duration of the disability if it is temporary. In the event of a permanent disability, 90% of the employee’s wages will be paid until their death.
Sickness Benefit
The insured employees are also entitled to a sickness benefit in cash. Employees State Insurance Corporation pays 70% of the insured worker’s wages during periods of sickness certification for up to 91 days per year.
Maternity Benefit
ESIC helps insured women employees during pregnancy. ESIC provides maternity benefits for confinement/pregnancy, which are granted for a duration of six months. However, in order to be eligible for these benefits, one must have made contributions for a minimum of 70 days in the preceding year.
Benefits for dependents
If the insured employee dies prematurely due to an accident at work, ESIC will pay a monthly benefit of 90% of the wage to his or her dependents.
Unemployment benefit
The ESIC provides for unemployment benefits equal to 50% for a maximum of one year, and for medical care from ESI hospitals for the self and family in the event of permanent disability due to a non employment injury or an involuntary termination of employment.
Documents required for ESIC registration
No physical documents are needed to register online. Documents required to fill out the online registration form include:
Registration certificate obtained under:
- Acts relating to Factories
- Shops and Establishment Act
The certificate of incorporation is as follows:
- Certificate of Registration of a Company in the case of an organization.
- In the case of a firm that is a partnership, if you have drafted a deed.
- Certificate of GST for the establishment
Address proof for the establishment. Address proof can include any of the following:
- Utility bills (Either electricity, gas connection or telephone bill for the establishment that does not exceed three months).
- Renting the land where the establishment is located
- Tax receipts for the land where the establishment is located
List of employees in an establishment.
PAN card of the business as well as the employees who work in the establishment.
All employees’ compensation information.
The company’s bank account cancelled cheque
List of Directors of the Company
List of shareholders of a company
The attendance register is a record of employee attendance.
The Memorandum of Association and a company’s Articles of Association.
Documents required for ESIC Returns
The employers must file ESI returns every half-year after registering under ESIC. For the return filing, the following documents are needed
Attendance register of employees
Form 6 – Register.
Register of Wages
Keep a record of all accidents that have occurred on your premises.
Monthly returns and challans
Frequently Asked Questions
Do employers have to sign up for ESI?
Absolutely. Every employer covered by the ESI Act is required to sign up for the ESI scheme. Any factory or establishment with more than 10 employees (in certain states, it’s 20 employees) and a monthly salary cap of Rs.21,000 falls under the ESI Act. They are obligated to register with the ESIC within 15 days after their coverage under the Act begins.
What happens if an employer doesn't pay the ESI contribution on time?
If an employer registered with the ESIC fails to make the required ESI contribution for an employee, they will be charged a simple interest rate of 12% per year for each day the contribution is overdue or not made.
Can a factory or establishment lose its ESI coverage if it has fewer employees than the minimum limit?
Once a factory or establishment is registered under the ESI Act, it remains covered even if the number of employees drops below the set limit or there’s a change in the production activities.
How can an employee check their ESI registration online?
An employee of a factory or establishment registered with the ESIC can verify their ESI details by visiting the ESIC website. They need to click on the ‘Insured Person Login’ button, enter their user number and a captcha code.
What is the ESI Code number?
The ESI Code number is a unique 17-digit identification number given to every employee of a factory or establishment registered with the ESIC. This number is generated through the ESIC portal after the employer has submitted the employee’s information.
How many employees are needed for ESI registration?
ESI registration is mandatory for all factories or entities with 10 or more employees who earn a maximum of Rs. 21,000. However, in some states, this number is 20 employees.
What is an insurance number?
To identify each employee, the ESI scheme assigns a unique identification number to every employee, known as the insurance number. This number is used to access the benefits provided under the ESI scheme.
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