ESI Registration & Return Filing

ESIC Registration – Process, Benefits, Documents Required

The government introduced the ESI scheme for Indian workers. ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation (ESIC). The ESIC is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India.
ESI scheme provides social security to the workers. Employers and employees contribute a percentage of employee's wages towards ESI every month. Huge variety of medical, monetary and other benefits is provided to workers covered under the ESI Act.

ESIC Registration Eligibility

Any non-seasonal factory or establishment having more than 10 employees (in some states it is 20 employees) who have a maximum basic wages/salary of Rs. 21,000 per month (Rs.25,000 per month in the case of persons with disability) are covered under the ESI scheme and thus, they have to mandatorily register with the ESIC within 15 days from the date of its applicability.
Under this scheme, the employer needs to contribute an amount of 3.25% of the total monthly wage payable to the employee whereas the employee needs to contribute only 0.75% of his monthly wage every month of the year. The only exemption to the employee in paying his contribution is whose daily wage is less than Rs.176/- per day.

Entities Covered Under ESIC

As per the government notification, under Section 1(5) of the ESI Act the following entities under state government are covered:
  • Shops
  • Restaurants or hotels engaged only in sales.
  • Cinemas including preview theatres.
  • Road motor transport establishments.
  • Newspaper establishments (which is not covered under the Factory Act).
  • Private medical institutions.
  • Private educational institutions.
Casual employees of Municipal Corporation or Municipal Bodies
When the above-mentioned establishments employ 10 or more persons, the owner/employer of the establishment must compulsorily register it with the ESIC.
The Central Government has extended the coverage under Section 1(5) to the following entities under Central Government:
  • Shops
  • Hotels and restaurants
  • Road motor transport establishments
  • Cinema including preview theatres
  • Newspaper establishments
  • Establishments engaged in:
  • Insurance business
  • Non-Banking Financial Companies (NBFCs)
  • Port trust
  • Airport authorities
  • Warehousing
When the above-mentioned establishments employ 20 or more persons, the owner/employer of the establishment must compulsorily register it with the ESIC.

Documents Required for ESIC Registration

Since the procedure for registration is online, no physical documents are required to be submitted. The documents required while filling the online registration form are:
Registration Certificate obtained either under the:
  • Factories Act, or
  • Shops and Establishment Act.
  • Certificate of incorporation of the establishment, which are as follows:
  • Certificate of Company Registration in case of a company.
  • Partnership deed in case of a partnership firm.
  • GST certificate of the establishment.
  • Memorandum of Association and Articles of Association of the company.
  • Address proof of the establishment. Any one of the following can be submitted as address proof:
  • Utility bills (Electricity bill, gas connection bill or telephone bill of the establishment not exceeding three months)
  • Rental agreement of the land on which the establishment is situated
  • Property tax receipts of the land on which the establishment is situated
  • A list of all the employees working in the establishment.
  • PAN Card of the business establishment as well as all the employees working in the establishment.
  • The compensation details of all the employees.
  • A cancelled cheque of the bank account of the company.
  • List of directors of the company.
  • List of the shareholders of the company.
  • A register containing the attendance of the employees.

Benefits of ESIC Registration

The benefits of registering under this scheme are varied. Some of them are:
Sickness benefits at the rate of 70% of wages for a maximum period of 91 days in any year in case of any certified illness.
Extended sickness benefits upto two years to the employees in the case of 34 malignant and long-term diseases at the rate of 80% of wages.
Enhanced sickness benefits equal to full wages for employees undergoing sterilisation for family planning upto 7 days for Vasectomy and 14 days for Tubectomy.
Medical benefits to an employee and his/her family members.
Medical benefits to retired employees and their spouses upon payment of an annual premium of Rs.120.
Maternity benefit at the rate of full wage to the women who are pregnant (paid leaves for 26 weeks, which can be extended by one month).
If the death of the employee happens due to employment injury or occupational hazards, 90% of the wages is given to his/her dependents in the form of a monthly payment after the death of the employee.
Temporary disablement benefits in case of employment injury at the rate of 90% of wages till the disability continues.
Permanent disablement benefits at the rate of 90% of wages is given every month depending upon the extent of loss of earning capacity certified by a Medical Board.
Funeral expenses of Rs.15,000 is given to the dependents of the employees or the person who performs the last rites of the employee.

Compliances After ESIC Registration

The establishment needs to comply with the following after registering under the ESIC:

  • Maintaining the attendance register.
  • Maintaining a complete register of wages for workers.
  • Inspection book.
  • Monthly return and challan within 15th of the succeeding month.
  • Maintaining a register that records any accidents that happened on the premises.
  • Returns To Be Filed After ESIC Registration
After the registration under the ESIC, the employers have to file ESI Returns half-yearly. The following documents are required for the filing of the returns:

Register of attendance of the employees.

  • Form 6 – Register.
  • Register of wages.
  • Register of any accidents which have happened on the premises of the business.
  • Monthly returns and challans.

Frequently Asked Questions

Yes. All the employers who are covered under the ESI Act have to mandatory register themselves under the ESI scheme. The factories or establishments having more than 10 employees (in some states it is 20 employees) with a maximum wages of Rs.21,000 per month are covered under the ESI Act. They must register with the ESIC within 15 days from the time the organisation is covered under the ESI Act.

When an employer registered under the ESIC fails to pay the prescribed contribution towards the ESIC of an employee, the employer will be liable to pay simple interest at the rate of 12% per annum in respect of each day of delay or default in payment of contribution

Can a factory or establishment covered under the ESI Act go out of coverage if the number of persons employed goes below the minimum limit prescribed?
Once a factory or establishment is covered under the Act, it continues to be covered even when the number of persons or employees at any time falls below the required limit or there is a change in the manufacturing activity.

An employee of a factory or establishment registered with the ESIC can check their ESI registration details with the insurance number issued to the employee at the time of ESIC registration. The employee must visit the ESIC website, click on the ‘Insured Person Login’ button and enter the user number and captcha code. The user number is the insurance number of the employee.

The ESI code number is a unique 17-digit identification number allotted to every employee of a factory or establishment registered with the ESIC. The 17 digit number is generated using the ESIC portal after the employer has submitted their employee’s information.

ESI registration applies to all factories or entities that employ 10 or more persons who have a maximum wage of Rs. 21,000. However, in some states, it is 20 employees.

To recognise each employee, the ESI scheme allots a unique identification number to every employee to recognise each employee. This number is called the insurance number and is used for obtaining benefits provided under the ESI scheme.