Introduction
The Employee State Insurance (ESI) Scheme is a social security and health insurance scheme for employees in India. It is administered by the Employees' State Insurance Corporation (ESIC), a statutory body under the Ministry of Labour and Employment, Government of India. ESI registration is mandatory for certain categories of employers and provides employees with various benefits such as medical care, sickness benefits, maternity benefits, and disability benefits.
Key Features of ESI Registration
Applicability
-
ESI registration is mandatory for factories and other establishments having 10 or more employees (in some states, the threshold is 20 employees) where wages are less than or equal to Rs. 21,000 per month.
Contribution
-
Both the employer and employee contribute to the ESI fund. Currently, the employee contributes 0.75% of the wages, while the employer contributes 3.25% of the wages payable to the employee.
Benefits to Employees
-
Medical Benefits: Employees and their dependents are entitled to medical care at ESI dispensaries, hospitals, and clinics.
-
Sickness Benefits: Employees are entitled to cash benefits during periods of sickness, maternity, and temporary or permanent disablement.
-
Maternity Benefits: Female employees are entitled to paid maternity leave and medical benefits during pregnancy and childbirth.
-
Disability Benefits: Employees who suffer from temporary or permanent disablement are entitled to cash benefits.
Application Process
-
The employer must apply for ESI registration within 15 days from the date of the ESI Act becoming applicable to the establishment.
-
The application for ESI registration is filed online through the ESIC portal or through authorized service providers.
-
The employer must submit necessary documents such as PAN card, address proof, list of employees, and details of wages along with the application.
Issuance of ESI Code
-
Upon verification of the application and documents, the ESIC issues the ESI registration certificate (ESI code) to the employer.
-
The ESI code is unique to each establishment and is used for remittance of contributions and availing benefits under the ESI scheme.
Compliance Requirements
-
The employer must maintain accurate records of employees, wages, and contributions and submit monthly contributions to the ESIC within 15 days from the end of the contribution period.
-
File half-yearly returns (Form 6) with the ESIC containing details of employees, wages, and contributions.
Penalties for Non-Compliance
01
Failure to obtain ESI registration or pay contributions within the prescribed timelines can attract penalties, fines, and legal consequences.
02
The ESIC may impose penalties for late payment of contributions, non-filing of returns, or non-compliance with statutory requirements.
​Conclusion
ESI registration is a vital requirement for employers in India to provide social security and health insurance benefits to their employees. By obtaining ESI registration and complying with the provisions of the ESI Act, employers can ensure the welfare and well-being of their workforce and mitigate risks associated with non-compliance. It is advisable for employers to obtain ESI registration at the earliest and fulfill their statutory obligations to promote a healthy and secure work environment for their employees.