What is ESI?
Employee State Insurance (ESI) is administered by the Employee State Insurance Corporation, an autonomous organisation established by law and overseen by India's Ministry of Labour and Employment. ESI applies to factories with a workforce of ten or more people. Currently, every industry or firm employing ten or more people earning up to Rs 21000 per month must register for ESI.
The company is required to contribute 3.25 percent of the entire monthly salary provided to the employee, whereas the employee is simply required to contribute 0.75 percent of his monthly salary every month of the year under this system. Only employees earning less than Rs. 176/- per day are excused from paying their contribution.
Which category of employees are covered under this scheme?
Under ESI registration, the below-mentioned categories of persons are to be counted in addition to the persons directly employed:
Persons on the roll of a factory, who are on leave with or without wages
A substitute or badly worker employed for wages
Directors who are on the payroll of a company
Persons drawing over Rs 21000 per month as wages, but not coverable otherwise
Persons employed by or through a contractor and working under the direct supervision of the employer
Apprentices or trainees undergoing training and learning the trade under an approved scheme will not be counted.
What are the benefits of this Scheme?
Medical Care benefit to an employee and his family members.
Sickness benefit where cash compensation at the rate of 70% of wages is payable to insured workers during the periods of certified sickness for a maximum of 91 days in a year.
Maternity benefit for pregnancy is provided for three months which is extendable by further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding year.
Disability Benefit from the day of entering insurable employment and irrespective of having paid any contribution, 90% of wage is payable so long as temporary disability continues. And in case of permanent disablement benefit is payable at the rate of 90% of wage in the form of monthly payment to the extent of loss of earning capacity as certified by a Medical Board.
Benefit to dependents in case the death of an employee happens while on work 90% of the salary is given to his dependents every month after the death of the employee.
Old age care medical expenses.
Funeral expenses include an amount of Rs. 10,000 which is payable to the dependents or to the person who performs last rites from day one of entering insurable employment.
What are the documents required for the registration in ESI?
As the registration process is conducted entirely online, no physical papers are necessary. The following documents are necessary while completing the online registration form:
Certificate of Registration received under one of the following circumstances:
The Factories Act,
The Shops and Establishments Act
In the case of a company a certificate of incorporation is required, and a partnership deed in the case of a partnership business.
The company's Memorandum of Association and Articles of Association.
Utility receipts or a rental agreement can be used as proof of residence.
A list of all the employees who work at the organization.
The company's PAN card, as well as the PAN cards of all workers that work there.
All of the workers' remuneration information.
A cancelled cheque from the company's bank account.
A list of company's board of directors
Record of employees attendence
What is the procedure for the registration in ESI scheme?
Step 1: An employer must register on the ESIC portal by going to the main screen and clicking on the 'Employer Login' option.
Step 2: The employer will get a confirmation email to the registered email id and mobile number submitted at the time of sign up after submitting the form for portal sign up. The login and password for registering as an employer and employee under the ESIC programme will be included in the email.
Step 3: The employer must fill out the Employer Registration Form-1 (ESI Registration Form) with information about the employer's unit, employer details, factory/establishment data, and employee details. Once the employer has completed the form, he or she must click the 'Submit' button.
Step 4: Following the successful payment of the six-month advance contribution, the ESIC department will send the employer a system-generated Registration Letter (C-11) with a 17-digit Registration Number. The Registration Letter (C-11) is a legal proof of the employer's registration.
|Acceptable Document||Document Type||Additional Details|
|List of all employees working in the establishment|
|Register containing the attendance of the employees|
|Certificate of registration in case of company & partnership deed in case of a partnership|
|Compensation details of all the employees|
|PAN card of Business Entity|
|MOA & AOA of the company|
|Registration certificate obtained under factories Act & Shop and Establishment Act|
|Cancelled cheque of the bank account of company|
|List of directors/shareholders of the company|
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