After taking ESIC Registration, the ESI Act provides for medical attendance and treatment, cash benefits during sickness, maternity and employment injury, pension for dependents on the death of workers due to employment injury, and funeral expenses of the insured person. Wherever the ESI Scheme is extended, employers are absolved of their liability under the Employee’s Compensation Act, 1923 and under the Maternity Benefit Act, 1961 from the date from which maternity benefit becomes payable under the ESI Act.
For factories and establishments employing more than 10 employees, registering under Employee’s State Insurance (ESI) is mandatory as per the ESI Act. The employer needs to apply for ESI registration within 15 days. ESI works as medical insurance for covered employees. ESI-covered employees enjoy various benefits like medical treatment and maternity benefits. ESI also benefits employees’ families with medical, surgical and obstetric treatment, supply of all drugs, ambulance services, super-specialty consultation, etc. ANBCA can help you apply for ESI Registration.
Major ESI benefits to employees:
- Medical care benefits
- Medical benefits to family members
- Maternity benefits
Applicability of ESI Registration
ESI is applicable where 10 or more persons are employed in any of the following establishments. It is a statutory responsibility of the employer under Section 2A of the Act read with Regulation 10-B. The employer shall apply for registration once the applicability of ESI is validated, by submitting documents on the ESI portal.
- Shops
- Cinemas
- Roadside motor transport establishments
- Newspaper establishments
- Private educational institutions and medical institutions
- Hotels or restaurants not having any manufacturing activity, but only providing service
Note: In a few states, the minimum requirement for ESI registration is 20 or more employees. A few State Governments have not extended the scheme to include medical & educational institutions.
ESIC Highlights
- Applicability: The Act applies to all factories, excluding mines, railway running sheds and seasonal factories. The Act becomes applicable if the strength of employees in the establishment crosses the specified number.
- Benefits under ESIC: 1. Medical benefit, 2. Sickness benefit, 3. Employment injury benefit, 4. Maternity benefit, 5. Permanent disablement benefit.
- ESI Benefit: Under the ESI scheme, covered employees get medical and sickness benefits. Registered employees can avail medical facilities at registered hospitals and are also eligible for sick pay.
Our ESIC Services
We help our clients get online ESI registration and advise on compliances under ESIC. We also provide services for ESIC calculation, filing of returns, monthly payments etc. We have an in-house advocate and practitioner dealing with work pertaining to Labour Law and allied services, providing a wide range of services such as licensing, maintenance of records and consultation to the corporate world.
- ESIC Registration
- ESIC Compliances
- Amendments / changes in ESIC Registration
- ESIC payment working and advice
- Labour Law consultancy
Checklist of Documents for ESI Registration
Business Details
- Certificate of Incorporation / Shop Act
- AOA & MOA / Partnership Deed
Address Proof
- Address proof of premises
Bank Details
- Bank account details
ID Proof
- Details of employees
- KYC of directors / partners / proprietor
- Particulars of employees
- Application form
What We Offer
- ESIC Code Letter
- Simplified Excel template
- Employer-Employee Agreement
- Advice on compliances
ESI Registration Process
- Send Us Documents by Email — Send us the necessary documents and other supporting information for ESI registration. We will share a detailed checklist of documents.
- Application Preparation — An A N Bhutada & CO ESI expert will prepare your ESI application along with the necessary supporting documents that need to be submitted.
- Application Processing — Once the application is prepared and submitted, the concerned ESI office will process the application and may request more information or documents.
- Certificate Approval — While processing the application, our ESI expert will respond to department queries, if any. With follow-up, we obtain your ESI Certificate.
FAQ – Employee State Insurance (ESI)
How is the scheme funded?
The ESI scheme is a self-financing scheme. The ESI funds are primarily built out of contributions 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 the ESI code registration number?
The ESI code is a 17-digit number allotted to the employer. This unique ESI code is generated by the ESIC portal after submission of information and legal documents.
I have branches — do I need separate ESI code registration?
Yes. Sub-code registration can be taken for sales offices, branch offices etc., whether the establishment is located in the same state or a different state.
Does ESI need to be calculated on overtime paid to an employee?
Routine overtime is not a regular and continuous source of an employee’s wages. If overtime were considered in wages, there is a chance employees would get removed from the scheme for some time. Hence ESI calculation is not applicable on overtime.
What is the due date for payment of ESI contribution?
ESI contribution needs to be paid by the 15th of the next month. For example, ESI for June is to be paid by 15 July.
What is the rate of interest on delayed payment of ESI contribution?
Simple interest at the rate of 12% per annum in respect of each day of delay or default in payment of contribution.
What legal records are to be maintained after ESI registration?
- Muster roll, wage record and books of account maintained under other laws
- Accident register in new Form 11
- An inspection book
- The immediate employer is also required to maintain the Employees’ Register for employees deployed to the principal employer
What is the medical benefit to employees after ESI registration?
Medical benefit means the medical attendance and treatment for 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 the ESI Corporation (except in Delhi), and it is provided uniformly to all as per their requirement, without linking it to their wages or contributions.
Under ESI, who is a Principal Employer?
Under Section 2(17), Principal Employer means: (A) In the case of a factory: (i) owner; (ii) occupier; (iii) managing agent of the owner or occupier; (iv) legal representative of a deceased owner or occupier; (v) manager of the factory under the Factories Act, 1948. (B) In the case of establishments belonging to or under the control of the Government of India: (i) the specified authority, or (ii) the head of the department (in the absence of a specified authority). (C) In the case of other establishments: the person responsible for the supervision and control of the establishment. (D) In case of a shop: the owner, proprietor, partners, directors, or the management of the owner.
What is the salary/wages limit for an employee to get ESI benefit?
Salary / wages up to ₹21,000 per month (w.e.f. 01.01.2017). Hence employees drawing salary below ₹21,000 per month are eligible for ESI benefit.
How to calculate wages for ESI contribution?
The following wage components are taken into account for computation of wages for payment of contribution: (a) basic pay/wages/salary; (b) DA / HRA / CCA / overtime / officiating allowance / night shift allowance / efficiency allowance / heat, gas, dust allowance / education allowance / food & tea allowance / conveyance allowance (overtime wages are included for contribution but not for determining coverage); (c) wages/salary/pay for weekly off and public holidays; (d) commission paid to sales staff; (e) subsistence allowance paid during suspension; (f) attendance bonus or incentive or ex-gratia in lieu of attendance bonus or production incentive; (g) regular honorarium or salary or remuneration paid to a director; (h) collection bhatta paid to running staff, production incentive, bonus other than statutory bonus, meal/food allowance; (i) actual payments made towards leave salary, lay-off compensation, or wages for strike period; (j) any other remuneration paid or payable in cash to an employee if the terms of the contract of employment, expressed or implied, were fulfilled.
What is the Maternity Benefit under ESI?
It is a benefit to a woman for a specified period of absence from work in cases of:
- Miscarriage
- Premature birth of child or confinement
- Sickness arising out of pregnancy
What is the ESI contribution rate?
The employer’s share is 3.25% and the employee’s share is 0.75% of wages, making the total ESI contribution 4% (rates effective from 01.07.2019).
More Questions? Seek Help of an Expert — Call us at: +91 80555 66789 or Email us: office@anbca.com
