What is ESI?
Employees’ State Insurance (ESI) is a self-financing social security and health insurance scheme for Indian workers. ESI is just like a social insurance scheme that would protect the interest of workers in possibilities such as sickness, maternity, temporary or permanent physical disablement and death due to employment injury resulting in loss of wages or earning capacity. The Act also guarantees reasonably good medical care to workers and their immediate dependents. All Establishments and Factories employing more than 10 employees are required to mandatorily apply for ESI registration within 15 days of the ESI Act, 1948 becoming applicable to them. ESI registration is mandatory for all employees earning INR 21,000 per month or less per month as wages or salary. ESI Registration can be done online from anywhere in India.
Who is required to get ESI registration?
The following establishments employing 10 or more persons attract ESI coverage:
- Hotels or restaurants not having any manufacturing activity, but only providing service.
- Roadside Motor Transport Establishments;
- News paper establishments.
- Private Educational Institutions and Medical Institutions
In some states the minimum employees required for coverage is for 20 or more. A few State Governments have not extended scheme to include Medical & Educational Institutions.
What are documents required for ESI registration?
- Registration Certificate or Licence issued under Shops and Establishment Acts or Factories Act.
- Address Proof: Latest Rent receipt of the premises you are occupying indicating the capacity in which the premises are occupied, if applicable.
- Latest building Tax/Property Tax receipt (Photocopy).
- Memorandum and Articles of Association/Partnership Deed/Trust Deed depending on the entity that is applying for registration.
- Photocopy of certificate of Commencement of production and/or Registration No. of CST/ST (or GST once it becomes applicable).
- Copy of PAN Card
- Evidence in support of the date of commencement of production/business/first sale (e.g. Copy of First Invoice).
- Month wise employment position, salary etc.
- Copy of latest bank statement
- Business Activity of the firm/company.
- E-Mail id and Mobile number of the firm/company.
- Details of Bank account along with a cancelled cheque
- Family Photo in Duplicate of employee
What are benefits of ESI registration?
- Medical benefit: Full medical care is provided to an Insured person and his family members from the day he enters insurable employment. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs.120/- .
- Sickness Benefit: Sickness Benefit in the form of cash compensation at the rate of 70 per cent of wages is payable to insured workers during the periods of certified sickness for a maximum of 91 days in a year.
- Maternity Benefit: Maternity Benefit for pregnancy is payable for Twenty Six (26) weeks, 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 Two Contribution Periods.
- Temporary disablement benefit: From day one of entering insurable employment & irrespective of having paid any contribution in case of employment injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long as disability continues.
- Permanent disablement benefit: The benefit is paid at the rate of 90% of wage in the form of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical Board.
- Funeral Expenses: An amount of Rs.10,000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment.
- Un-Employment allowance: ESIC Provides monthly cash allowance for a duration of maximum 24 months in case of involuntary loss of employment or permanent invalidity due to non-employment injury.
What are steps involved in ESI registration?
- ESI Registration: Establishments/Factories must register within 15 days of the ESI applicability.
- Code Number: A 17-digit code number is provided which is used in all Correspondence.
- Employees: At the time of joining, employees fill a Declaration Form and submit two copies of a family photo to the employer, which is submitted to the ESI.
- Insurance Number: The employee will then be allotted an insurance number for the purpose of his identification under the scheme.
- Temporary Identity Card: The employees are issued a temporary identity card for availing medical benefit for three months. Permanent Photo Identity Card: Finally, employees are provided a permanent photo identity card. There is no requirement of re registration during change of employment & same registration can be transferred from one employment to another.