The ESIC Registration Process Made Easy
Updated: Oct 2
The Employee State Insurance Corporation (ESIC) is a statutory body that provides social security and health insurance to workers in India. ESIC registration is mandatory for employers with ten or more employees who pay wages up to Rs. 21,000 monthly.
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Employees covered under ESIC are entitled to various benefits such as medical care, sickness allowance, maternity benefits, disability benefits, and dependent benefits. Read this article to learn about the ESIC registration process, the benefits of ESIC, the ESIC document requirements, and the eligibility criteria for both employers and employees. We will also answer some frequently asked questions about ESIC registration.
What is ESIC?
ESIC stands for Employees’ State Insurance Corporation, a statutory body established under the Employees’ State Insurance Act 1948. ESIC (Employee's State Insurance Corporation) is like a safety net for workers and their families. Its main job is to help when something unexpected happens, like getting sick, having a baby, becoming disabled, or passing away due to a work-related injury. To ensure it can help, ESIC collects money from the workers and gets some from the government. This way, if workers face tough times, they and their families have some money and support to rely on.
The Employees' State Insurance Scheme covers employees who earn wages up to Rs. 21,000 per month and work in factories, shops, hotels, restaurants, cinemas, road transport, newspapers, private medical institutions, and educational institutions. The scheme also covers apprentices and trainees employed under certain conditions. The scheme does not cover casual.
Features of ESIC
ESIC aim to safeguard the interests of workers in the organized sector against the impact of sickness, maternity, disability, and death due to employment-related injuries. It has many features; some of the main features of ESIC are discussed below:
ESIC Contribution Structure
The Employees' State Insurance Corporation (ESIC) operates on a funding model that relies on contributions from employers and employees. The current contribution rate is 4% of the wages, with a nuanced distribution: 3.25% contributed by the employer and 0.75% by the employee. This financial collaboration forms the bedrock of ESIC's comprehensive workforce support system.
ESIC's Holistic Healthcare Ecosystem
ESIC's mandate extends beyond financial contributions; it embraces a commitment to healthcare for employees and their dependents. This commitment materializes through an expansive network of hospitals, dispensaries, and diagnostic centers strategically positioned nationwide. The spectrum of medical care encompasses primary, secondary, and tertiary services alongside proactive preventive and promotional health services measures.
Cash Benefits for Employees
ESIC goes beyond medical care, recognizing the broad challenges employees may face. In the event of sickness, maternity, disablement, or death due to an employment injury, ESIC steps in with tangible support. The cash benefits provided are calculated as a percentage of the employee's average daily wages, subject to specific conditions and predefined limits.
ESIC's Welfare Initiatives
ESIC's commitment extends beyond medical and financial assistance, encompassing a spectrum of welfare schemes and programs designed for the holistic well-being of employees and their dependents. These initiatives include vocational rehabilitation, physical rehabilitation, the provision of artificial limbs, funeral expenses, education allowances, and skill development programs.
ESIC Registration Eligibility
ESIC scheme is for workers paid less than Rs. 21,000 per month (Rs. 25,000 for disabled workers).
Some factories or businesses with more than 10 or 20 workers (depending on the state) must join the ESI scheme.
They have to register with ESIC within 15 days of starting the scheme.
The employer pays 3.25% of the worker’s monthly wage to the ESI scheme.
The worker pays 0.75% of his monthly wage to the ESI scheme.
Workers who earn less than Rs. 176 per day do not have to pay anything to the ESI scheme.
Documents required for ESIC Online Registration
To register for ESI online, you need these documents:
A certificate that shows your business is registered under the Factories Act or the Shops and Establishment Act.
A certificate that shows your business is a company, a partnership firm, or any other type of establishment.
A certificate that shows your business pays GST.
A document that shows the purpose and rules of your company.
A proof of your business address. You can use any of these:
Bills for electricity, gas, or phone (not older than three months)
A rental agreement for the land where your business is
Property tax receipts for the land where your business is
A list of all your employees.
A PAN card for your business and all your employees.
The salary details of all your employees.
Cancellation of your business bank account.
A list of your company’s directors and shareholders.
A record of your employees' attendance.
How to Apply for ESIC Registration
The ESIC scheme covers any establishment or a non-seasonal factory with more than ten employees (20 employees in some states) whose maximum salary is INR 21,000 and INR 25,000 per month for persons with disabilities. To apply for the ESIC registration process, you can follow these steps for ESIC online registration:
Step 1: ESIC Portal Registration
Login to ESIC Portal: Visit the ESIC portal and click on the 'Employer Login' option.
Sign Up: Click the 'Sign Up' button, fill in the required details, and submit the form.
After selecting the 'Sign up' button, employers are required to input their information and proceed to submit the form.
Step 2: Confirmation Email
Confirmation Mail: After sign-up, receive a confirmation mail on the registered email ID and mobile number containing username and password details for ESIC registration.
Step 3: Employer Registration Form-1
Login to ESIC Portal: Access the portal using the received username and password.
New Employer Registration: Click on 'New Employer Registration' under the 'Employer Login' option.
Form-1 Submission: Fill in the 'Employer Registration Form 1' with unit details, employer information, factory/establishment details, and employee details. Submit the form.
Step 4: Payment for Registration
Payment Process: After Form-1 submission, proceed to pay the advance contribution. Click on 'Pay Initial Contribution.
Online Payment: Select the 'Online' option, confirm the displayed contribution amount, and proceed with the payment.
Challan Number: Note down the displayed 'Challan Number' and continue to the payment gateway page.
Payment Gateway: Choose the mode of payment and provide the necessary details to complete the payment.
Step 5: Registration Letter
Successful Payment: Upon successful payment of six months' advance contribution, receive the system-generated Registration Letter (C-11) via email.
Valid Proof: The Registration Letter (C-11) serves as valid proof of employer registration and contains a 17-digit Registration Number.
This completes the ESIC registration process, ensuring employers are successfully enrolled in the scheme.
Benefits of ESIC Registration
The Employee State Insurance Corporation (ESIC) is a statutory body under the Ministry of Labour and Employment, Government of India. It provides social security and health insurance benefits to employees and their dependents in case of sickness, maternity, disability, or death due to employment injury or occupational disease. The ESIC benefits of registering under this scheme are varied and include the following:
Sickness Benefits
One of the ESIC benefits is that employees receive sickness benefits equivalent to 70% of their wages, supporting them during certified illnesses for up to 91 days annually. This essential provision ensures financial assistance, aiding employees in recovery without compromising their income. The initiative prioritizes the workforce's well-being and fosters a supportive environment, acknowledging the challenges posed by health issues. By offering this safety net, the organization demonstrates a commitment to employee welfare, enabling individuals to address health concerns without the added burden of financial strain. This compassionate approach contributes to a healthier and more resilient work community.
Extended Sickness Benefits
Extended sickness benefits are grants offered to employees with long-term health issues. 80% of the employee’s regular wages can be paid to those dealing with serious and persistent illnesses such as tuberculosis, leprosy, cancer, and AIDS, among others. This assistance is practical for a period of up to two years. It serves the purpose of easing the financial burden of medical costs and treatments related to those conditions. The aim is to help employees through tough times, allowing them to concentrate on their health without undue financial burden.
Enhanced Sickness Benefits: Encouraging Family Planning
The provision of enhanced sickness benefits is meant to encourage employees to use family planning methods to help control the population. That is why employees on sterilization leave will be paid total wages for up to 7 days in case of Vasectomy and, accordingly, up to 14 days during the Tubectomy recovery period. The primary goal of this initiative is to encourage responsible family planning, ensuring that employees receive financial support when making these critical health decisions. This involves the provision of more generous sickness benefits, thus creating a favorable environment for family planning options and leading to improved life and health factors among employees and society.
Medical Benefits
Medical benefits are provided to employees and their family members through a network of ESIC hospitals, dispensaries, and empaneled private hospitals. These medical benefits include consultation, diagnosis, treatment, medicines, hospitalization, etc.
Medical benefits are available from the date of joining until the date of leaving the scheme or till the date of superannuation, whichever is earlier.
Medical Benefits to Retired Employees and their Spouses
Medical benefits are also provided to retired employees and their spouses upon payment of an annual premium of Rs.120. This helps retired employees and their spouses to avail the medical facilities of the ESIC scheme after retirement.
Maternity Benefits
Maternity benefits are paid to women employees at the rate of full wage for 26 weeks, which can be extended by one month on medical advice in case of pregnancy. This helps the women employees care for their health and well-being during pregnancy and childbirth.
Dependants' Benefits
Dependents' benefits are paid to the dependents of the employees in the form of a monthly payment at the rate of 90% of wages after the death of the employee due to employment injury or occupational disease. This helps the dependents maintain their standard of living and financial security after the loss of the breadwinner.
Temporary Disablement Benefits
Temporary disability benefits are paid to employees at the rate of 90% of wages till the disability continues in case of employment injury. This helps the employees to recover from the injury and resume their work.
Permanent Disability Benefits
Permanent disability benefits are paid to employees at the rate of 90% of their wages every month, depending upon the extent of the loss of earning capacity certified by a Medical Board in case of employment injury resulting in permanent disability. This benefit helps the employees compensate for the loss of income due to this disability.
Funeral Expenses
Funeral expenses of Rs.15,000 are paid to the dependents of the employees or the person who performs the last rites of the employee in case of death due to any cause. This helps the dependents of the person meet the expenses of the deceased employee's funeral.
Returns To Be Filed After ESIC Registration
ESIC is a schema that gives benefits to workers and their families. Employers who join ESIC have to send some documents to them twice a year. These ESIC documents are:
A list of who worked each day
A form with the names of all the workers
A record of how much money each worker got
A record of any injuries or incidents at work
Monthly reports and receipts
These ESIC documents help ESIC know how many workers are there, how much they earn, and if they need any help.
Conclusion
ESIC registration is a legal obligation for employers who have ten or more employees and pay wages up to Rs. 21,000 per month. ESIC registration provides social security and health insurance to employees and their dependents. ESIC registration can be done online through the ESIC portal by submitting the required documents and paying the prescribed fees. Employees who are registered under ESIC can avail of various benefits such as medical care, sickness allowance, maternity benefit, disablement benefit, and dependent benefits.
We hope this article has helped you understand the basics of ESIC registration. If you have any questions or feedback, please feel free to contact us at filemyreturns.taxbuddy.com
. Thank you for reading!
FAQs
Q1. What is the ESIC contribution rate?
For employees drawing monthly wages up to Rs. 21,000, the ESIC rates are 3.25% of wages payable by the employer and 0.75% of wages payable by the employee. Contributions are payable every month.
Q2. How do I get an ESIC login ID and password?
After obtaining the 17 digit ESIC registration number, employers can register on the ESIC member portal by creating login credentials, including a user ID and password. Employees can also register separately using details like their ESIC temporary cards. The portal allows viewing registration details, payment of contributions, updating records, availing services, and filing claims.
Q3. When do ESIC benefits start after registration?
There is no minimum contribution requirement for employees to avail of ESIC benefits. The benefits are applicable from the very first day after ESIC registration is completed and the contribution period starts. Employees and their families become eligible for medical care and other benefits immediately after registration.
Q4. Can I take voluntary ESIC registration?
Yes, any establishment with less than ten employees or employees drawing monthly wages above Rs. 21,000 can optionally register with ESIC. It provides additional social security coverage and benefits employees working in such establishments. The same contribution rates apply.
Q5. Is ESIC registration mandatory?
ESIC registration is mandatory and falls under statutory compliance for all establishments as soon as they meet the applicability criteria under the ESI Act, i.e., they employ ten or more persons drawing monthly wages up to Rs. 21,000. Non-compliance can result in fines, penalties, and even imprisonment. Employees must register within 15 days from the time organisation is covered under ESIC act.
Q6. Can I close or surrender ESIC registration?
Yes, ESIC registration can be surrendered if the employee strength goes below ten over a specified period or if wages start exceeding Rs. 21,000 monthly. Intimation has to be given online by filing Form 6 for closure of the ESIC account, after which the scheme will not apply.
Q7. How can employees check their ESIC registration status?
Using their credentials, employees registered with ESIC can check their registration status by logging into the ESIC member portal. The portal will display registration details like their ESIC number, contribution paid, eligibility status, and transaction history. They can also check with their employers.
Q8. Can independent contractors and self-employed persons enroll with ESIC?
ISIC registration is meant only for employees working in establishments covered under the ESI Act. Self-employed, independent contractors, and freelancers cannot directly take coverage under the ASIC scheme.
Q9. Where can I find more information about ESIC registration?
More details regarding the ESIC registration process, applicable establishments, documents required, return filing, claim settlement, and other compliance information is available on the official ESIC website at www.esic.in. You can also contact the ESIC helpline or visit your nearest ESIC regional or sub-regional office for clarifications.
Q10. What is the penalty for not paying the ESIC contribution on time?
Employer is liable to pay the 12% simple interest per annum. In respect of every day of delay in the contribution payment.
Q11. What is ESI code number?
The code number is the 17 digit identification number that is allotted to every employee of the factory. It is generated through ESIC portal after the employer have submitted its employee’s information.
Q12. How many employees are required for ESI registration?
ESI registration applies to all the factories that employ 10 persons who have the maximum wage of INR 21,000. But in some states, it is 20 employees.
Q13. What is meant by insurance number?
Recognise each employee, the ESI scheme allows a unique identification number to every employee for their recognition. This number is known as insurance number. The number is used to obtain the benefits offered under ESI scheme.
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