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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:
(*20 in some states)
Section 46 of the ESI Act provides for the following six social security benefits:
Source: ESIC website
The documents required for the registration are –
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:
(*20 in some states)
How Many Employees are Required for Registration of Establishment?
|State||Minimum employees to be registered||State||Minimum employees to be registered|
|Jammu & Kashmir||20||Karnataka||10|
|Madhya Pradesh||10||Arunachal Pradesh||20|
|Rajasthan||10||Daman and Diu||20|
|Sikkim||20||Dadra and Nagar Haveli||20|
|Tamil Nadu||20||Andaman and Nicobar||20|
|Uttar Pradesh||20||Outside India||20|
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:
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.
Code number is a 17-digit unique identification number which is allocated to establishments and factories registered under the provisions of the ESI Act. This unique ID number is generated via ESIC portal following submission of the required information by the employer. The code number can also be generated upon receipt of Survey Report by the Social Security Officer.
This is a unique ID number assigned to a sales office, sub-unit, branch office, or registered office of a covered factory or establishment situated in the same state or different state. Any branch or sales office can be registered by the employer through ESIC Portal, using his or her credentials and unique primary registration code number.
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’. Once this is complete, the individual will be asked to make an advance contribution to complete the registration procedure. A code number will be generated and a copy of registration letter is sent to the email address of the employer.
Units or establishments with 10 or more employees (20 in some states) who are drawing wages of up to Rs. 21,000 a month are required to be registered for ESI under the ESI Act 1948.
The scheme is self-financed. The funds are mainly built from contribution of employers and employees, payable monthly at a fixed percentage of wages paid. The state governments also bear a part of the cost of medical benefit.