ESIC Registration: Process, Benefits, Documents, and Application

The Employee State Insurance (ESI) scheme, managed by the autonomous Employee State Insurance Corporation (ESIC) under India's Ministry of Labour and Employment, aims to protect Indian workers' welfare. It serves as a crucial social security measure. Both employers and employees contribute a portion of the employee's pay each month to the ESI fund. Covered workers receive various benefits, including medical aid, financial support, and more, fortifying the protective framework under the ESI Act. This initiative stands as a significant pillar for ensuring the well-being of the Indian workforce.

About ESIC Registration

ESIC registrationis a mandatory requirement for businesses employing a certain number of employees in India. The scheme, governed by the Ministry of Labour and Employment, ensures social security and various benefits for workers. Establishments with more than 10 employees (in some states, 20 employees) earning a maximum wage of INR 21,000 per month (INR 25,000 for individuals with disabilities) fall under the ambit of ESIC.

ESIC registrationmust occur within 15 days of the scheme's applicability. Employers contribute 3.25% of the total monthly wage payable to employees, while employees contribute 0.75% of their monthly wage, with exceptions for those earning below INR 176 per day.ESI registrationis mandatory for eligible businesses in India, offering social security benefits to employees, including medical care, financial aid, and maternity benefits, among others.

What is ESIC?

The Employee State Insurance Corporation (ESIC) is a significant social security scheme in India catering to the welfare of employees across various sectors. Established under the ESI Act of 1948, it ensures comprehensive benefits to covered employees, addressing healthcare, monetary support, and more. ESIC operates as an autonomous body overseen by the Ministry of Labour and Employment, Government of India.

ESIC provides an extensive range of benefits, including medical care for employees and their families through ESIC hospitals, clinics, and tie-ups with private medical providers.

Both employers and employees contribute a percentage of the employee's wages towards the ESIC fund, allowing access to these benefits. The scheme primarily covers non-seasonal factories or establishments with specified employee counts and salary limits.

Overall, ESIC stands as a vital safety net, ensuring social security and essential assistance for employees and promoting a more secure and supportive work environment across the nation.

Features and Functions of ESIC

The Employee State Insurance Corporation offers vital medical care provisions from the very beginning to insured individuals and their dependents. This comprehensive coverage includes specific illnesses, granting cash benefits equivalent to 70% of an employee's wages for up to 91 days. To access this aid, workers must contribute for at least 78 days over six months.

For female employees, ESIC provides essential maternity benefits, allowing a 26-week leave that can be extended by one month without altering wage levels. During this period, they receive full wages for 70 days based on their contributions.

Unemployed individuals, by revealing prior job history and retrenchment papers, can receive 50% of their wage as monthly cash support for up to two years, provided they've been insured for a minimum of three years.

ESIC serves as a pivotal safety net, offering vital aid to employees and their families in various circumstances.

Process of Registration

TheESI registration process has shifted significantly to online methods, simplifying the process into key steps:

• ForESIC login, access the ESIC portal, register by clicking 'Employer Login,' proceed to 'Sign Up,' and receive a confirmation email on submission.
• Upon confirmation of the email receipt, obtain essential username and password details for employer and employee registration under ESIC.
• Log in again to access 'Employer Registration—Form 1,' inputting comprehensive employer, establishment, and employee details, followed by an advance contribution prompt.
• Engage in the online payment process by selecting 'Pay Initial Contribution,' choosing the payment mode, and confirming the amount.
• Receive a system-generated registration letter (C-11) via email, serving as valid proof of successful ESI registration onlineand containing a unique 17-digit registration number for compliance and authenticity.

Benefits of ESIC Registration

Enrollment in this scheme offers diverse benefits, including sickness support covering 70% of wages for 91 days during certified illnesses.

• Prolonged illness entitles employees to extended sickness benefits at 80% of their wages for two years. Additionally, those undergoing family planning sterilization receive full wages for specific periods as enhanced sickness benefits.
• The scheme extends medical benefits not only to employees but also to their families, even covering retired employees and spouses upon an annual premium payment.
• Maternity benefits guarantee full wages for 26 weeks, extendable by one month, aiding pregnant women.
• In the event of an employee's work-related death, dependents receive 90% of monthly wages, while temporary disability offers 90% wage support during the disability, and permanent disability benefits depend on the certified loss of earning capacity.
• Funeral expenses of INR 15,000 are allocated to dependents or individuals performing the employee's last rites.

How to apply for ESIC Online?

The ESI registration procedure is completely online.

• It involves a structured process for seamless registration by accessing the ESIC portal, clicking on 'Employer Login,' and then proceeding to 'Sign Up' to initiate the registration process.
• Upon submission, a confirmation mail is sent to the registered email and mobile number, containing essential username and password details for both employer and employee registration.
• Log in again to access 'Employer Registration—Form 1,' entering comprehensive details regarding the employer's unit, personal information, establishment specifics, and employee data.
• Once completed, it prompts payment for the advance contribution.
• Select 'Pay Initial Contribution,' choose the payment mode, and confirm the amount.

Upon successful payment, a system-generated registration letter (C-11) is emailed, serving as valid proof of ESIC registration and housing a unique 17-digit registration number, ensuring compliance and authenticity for employers.

Who Needs to Register with ESIC?

Businesses or establishments employing more than 10 (in some states, 20) workers, each earning up to INR 21,000 per month (or INR 25,000 for individuals with disabilities), must adhere to mandatory registration with the Employee State Insurance Corporation (ESIC). This regulation is pertinent for non-seasonal factories or establishments across diverse industries and sectors.

Compliance with this criterion obligates employers within the specified employee count and wage brackets to register themselves and their eligible employees under the ESIC scheme. This registration stands pivotal, offering employees and their dependents access to a safety net of social security benefits, comprehensive medical care, and various provisions outlined under ESIC guidelines. Thus, the ESIC registrationensures a protective shield for employees, contributing to their well-being and providing essential support during unforeseen circumstances.

Documents required for ESIC online registration

For online registration with ESIC, certain imperative documents are essential. The documents for ESIC registrationinclude:

• A valid Registration Certificate pertinent to the business or establishment—like the Certificate of Incorporation for companies or Partnership Deed for partnerships—which is mandatory.
• The business or establishment must possess a PAN card for ESIC registration purposes.
• Bank details are crucial, necessitating documents that validate the bank account specifics, such as a canceled cheque or a bank statement. These are required for all online payments and transactions associated with the ESIC.
• Employee particulars are indispensable, inclusive of documents like Aadhaar cards, identity proofs, residential address confirmation, and salary details, facilitating their inclusion in the ESIC scheme.
• Verification of the establishment's address is essential and requires proof, such as a utility bill or rent agreement.
• For proprietors or partners, evidence validating ownership or partnership should be furnished for successful ESIC registration.

Returns To Be Filed After ESIC Registration

ESI-registered businesses have to file ESI returns periodically. It is governed under the ESI Act, 1948; ESIC (Employees' State Insurance Corporation), which provides benefits to employees in the event of their sickness, death, disability, injury, etc. These include monthly contributions encompassing both employer and employee shares of the ESI contribution, submitted monthly. The Half-Yearly Return of Contributions provides a summary of employer and employee contributions across six months, filed semi-annually covering April to September and October to March.

Accident reports are imperative; employers must report workplace accidents leading to employee injuries within 24 hours. Additionally, maintaining and updating attendance registers for employees is crucial to showcasing their working hours and ensuring alignment with ESIC regulations.

Timely and accurate filing of these returns is pivotal to complying with ESIC guidelines and sustaining adherence to the scheme's regulations.

Conclusion

ESIC registrationstands as a pivotal shield, securing the well-being of both employees and employers. Its significance lies in offering a safety net of medical care, social security, and financial aid during unforeseen circumstances. This commitment to employee welfare parallels SMFG India Credit's dedication to providing a financial cushion through business loans, aligning with the shared values of well-being and financial security.