What is ESIC Registration?

As defined in the Employees' State Insurance Act, 1948, Employee State Insurance provides financial protection to employees against ailments, disablement or demise as a result of work injuries. ESI is managed by the Employee State Insurance Corporation - an autonomous body established under the Ministry of Labour and Employment, Government of India.

According to Section 2(12) of the Act, the ESI scheme is applicable to non-seasonal factories employing 10 or more persons. However, in some states, like Maharashtra and Chandigarh, the threshold for coverage of establishments is 20 employees. Effective 01/01/2017, the existing wage limit for coverage under the Act is Rs. 21,000 per month (Rs. 25,000 per month for individuals with disabilities). All establishments, factories and units that fall under the purview of the ESI Act are mandatorily required to apply for the ESI registration within 15 days of the ESI Act becoming applicable to them.

The registration of employers under ESI Act is completely online. There is no need to submit any physical application documents prior to the registration or post it.

The employer has to first sign up and fill the empty columns as displayed on the ESIC portal. After the login credentials are created, the user must proceed to complete ‘new employer registration’. Some of the information required here will include name of unit, complete postal address, details of owners, details of employees working, etc. Once this is complete, the individual will then be asked to make an advance contribution to complete the registration procedure. A code number will be generated and copy of registration letter is sent to the email address of the employer. The employer can log on to the website of ESIC and undertake various online activities.

The features of the ESIC scheme are as follows:

• It was introduced by an Act of Parliament in 1948
• It is applicable to non-seasonal factories with 10 or more employees.
• The scheme has been extended to shops, restaurants, hotels, cinemas, road-motor transport undertakings, newspaper establishments, establishments involved in insurance business, NBFCs, airport authorities, port trust, and warehousing establishments with 10* or more employees.
• The scheme, under Section 1(5) of the Act, has been extended to private medical and educational institutions with 10* or more employees in certain States/UTs.
• The current wage limit for coverage under the Act (effective from 01/01/2017) is Rs. 21,000 per month (Rs. 25,000 per month for persons with disabilities).
• The scheme is now notified in 540 districts in 34 states and union territories.

(*20 in some states)

Section 46 of the ESI Act provides for the following six social security benefits:

Medical Benefit

• System of Treatment
• Scale of Medical Benefit
• Benefits to Retired IPs
• Artificial Limbs & Aids
• Special Provisions
• Administration of Medical Benefit in a State
• Domiciliary treatment
• Specialist consultation
• In-Patient treatment
• Imaging Services
• Reimbursement

Sickness Benefit

• Extended Sickness Benefit
• Enhanced Sickness Benefit

Maternity Benefit

Disablement Benefit

• Temporary disablement benefit
• Permanent disablement benefit

Dependants Benefit

Other Benefits

• Funeral Expenses
• Confinement Expenses

Source: ESIC website

The documents required for the registration are –

• A registration certificate obtained under the Factories Act or Shops and Establishment Act
• Partnership deed for a Partnership and Certificate of Registration for a Company
• PAN card of the business entity and the employees working for the entity
• MoA and AoA of the Company
• List of all the individuals employed in the establishment
• Compensation details of all employees
• Cancelled cheque of the company’s bank account
• List of the company’s directors
• List of the company’s shareholders
• Register with the attendance of the employees

After the registration form is verified, the government shall issue a 17-digit unique number. Employees registered under this scheme shall be given an ESI card, after submitting a form with details and photos of family members. It must be noted that while the registration is permanent and the number is valid for the lifetime of the company, changes (if any) have to be intimated to the ESIC.

According to the government notification, the Act is applicable to:

• Non-seasonal factories with 10 or more employees
• Further, the scheme has been extended to shops, restaurants, hotels, cinemas, road-motor transport undertakings, newspaper establishments, establishments involved in insurance business, NBFCs, airport authorities, port trust, and warehousing establishments with 10* or more employees.
• Private Medical and Educational institutions with 10* or more employees in certain States/UTs.
• The current wage limit for coverage (effective from 01/01/2017) is Rs. 21,000 per month (Rs. 25,000 per month for individuals with disabilities).

(*20 in some states)

How Many Employees are Required for Registration of Establishment?

Source: ESIC website

Compliance after ESI Registration

Companies that come under the purview of the ESI Act have to mandatorily file the annual return. The return of contributions should also be submitted with a copy of all ESI contributions paid once every six months. Additionally, organizations must maintain the following records:

• Attendance Register
• Wages Record
• Accident Register
• Form 6 Register
• Inspection Book
• File with all monthly challan & returns submitted

Managed by the Employees' State Insurance Corporation, ESI was formulated with the intent to act as a financial aid in times of medical emergencies. The self-financed social security scheme is designed to protect employees and their loved ones against financial distress arising from sickness, disablement or death due to employment injuries.