Employee State Insurance (ESI) in India is a social security and health insurance scheme administered by the Employees' State Insurance Corporation (ESIC). It provides medical, financial, and other benefits to employees and their dependents in the organized sector during sickness, maternity, disablement, or death related to employment. Both employers and employees contribute to the fund, with the employer contributing a larger portion. The benefits include free medical care, cash benefits for temporary disablement and maternity, monthly cash benefits for permanent or partial disablement, and dependent benefits.
BENEFITS
MEDICAL CARE
Insured employees and their dependents receive comprehensive medical care, including outpatient treatment, hospitalization, specialist consultations, and medications, free of cost.
SICKNESS BENEFIT
In case of temporary disablement due to sickness, insured employees are eligible for cash benefits equivalent to 70% of their wages, payable for a maximum of 91 days in a year.
MATERNITY BENEFIT
Female employees are entitled to paid leave for a period of 26 weeks, which can be extended in certain circumstances. During this period, they receive cash benefits equivalent to their wages.
DISABLEMENT BENEFIT
If an insured employee suffers permanent or partial disablement due to an employment injury, they receive monthly cash benefits based on the degree of disablement.
DEPENDENT BENEFITS
In the unfortunate event of an insured employee's death due to employment-related contingencies, their dependents are eligible for monthly cash benefits.
FUNERAL EXPENSES
The scheme also provides for the reimbursement of funeral expenses in the event of an insured employee's death.
ONLINE PROCESS FOR ESI REGISTRATION
The online process for ESI registration in India involves the following steps:
- Visit the Official Website: Go to the official website of the Employees' State Insurance Corporation (ESIC) at https://www.esic.in/.
- Click on "Online Registration": Look for the "Online Registration" or "ESI Registration" option on the website's homepage and click on it.
- Fill the Registration Form: Fill out the online registration form with the required information, such as the company's name, address, type of business, details of employees, and contact information.
- Generate Temporary Identification Number (TIN): After submitting the registration form, a temporary Identification Number (TIN) will be generated. Note down this number as it will be required for future reference.
- Verification of Form: The submitted registration form and details will be verified by the concerned authorities. This may involve scrutiny of the provided documents and information.
- Receive User ID and Password: Upon successful verification, the ESIC will provide you with a User ID and Password. Keep this information secure as it will be needed for accessing the online services.
- Login and Complete the Registration Process: Login to the ESIC portal using the provided User ID and Password. Complete the registration process by filling in additional details, such as bank account information and employee details.
- Submit Required Documents: Upload the necessary documents, such as the company's registration certificate, PAN card, and bank account details, as specified by the ESIC.
- Submit the Application: Review the filled-in form and uploaded documents for accuracy. Once verified, submit the application electronically.
- Acknowledgment and Registration Certificate: After successful submission, you will receive an acknowledgment and an ESI registration certificate, indicating that your registration process is complete.
DOCUMENTS REQUIRED
- Registration certificate or license issued under the Shops and Establishments Act or the Factories Act (for ESI online registration).
- Proof of address of the establishment.
- Rent receipt of the premises, indicating its capacity (if the premises are rented).
- Copy of the PAN card.
- Copy of the bank statement.
- Photocopy of the latest building tax or property tax receipt.
- Memorandum and Articles of Association or Partnership Deed registration or Trust Deed registration, depending on the type of entity applying for registration.
- Photocopy of registration certificate.
- Certificate of commencement of production (if applicable).
- Registration numbers of CST (Central Sales Tax), ST (Sales Tax), or GST (Goods and Services Tax) registrations.
ELIGIBILITY CRITERIA
To be eligible for ESI registration in India, the general rule is that the establishment should have 10 or more workers. However, in some regions, ESI applies only if there are more than 20 employees. Other eligibility criteria include:
- Gross Salary: Any employee with a gross salary of up to ₹21,000 per month is eligible for ESI coverage, with the assistance of their employer.
- EPFO Registration: The establishment should be registered with the Employees' Provident Fund Organization (EPFO).
- Contribution Percentage: The contribution towards ESI is 6.5% of the employee's gross salary, divided as 4.75% by the employer and 1.75% by the employee.
- Mandatory Coverage: For industrial units where there is a likelihood of injuries or health issues at the workplace, all employees with a salary below ₹21,000 per month must have ESI coverage.
REGISTERATION COMPLIANCES
After registering under the Employees' State Insurance Act, 1948, there are certain compliances that need to be followed:
- Activation of ESI Registration: Once the registration is obtained, the company must start complying with the provisions of the Employees' State Insurance (ESI) Act, 1948 within 6 months from the establishment date.
- Dormant Status: If the company is not immediately subject to the ESI Act, it has the option to make its registration number dormant within 6 months of obtaining it. This can be done by logging into the ESI system, which helps avoid penalties for non-compliance. The maximum duration for which a company can choose to be in the dormant status at one time is 6 months.
- Extension of Dormant Mode: In order to continue the dormant mode beyond the initial 6 months, the company must log in to the ESI website before 180 days expire from the start of the dormant status. This will allow for an extension of the dormant mode.
ESI RETURNS
After ESI registration, the employer is required to file ESI returns on a biannual basis. The following documents are typically necessary for filing these returns:
- Employee Attendance Register: A record of employee attendance, indicating the number of days worked by each employee during the relevant period.
- Form 6 Register: This register contains details of newly joined employees, such as their name, address, date of joining, and other relevant information.
- Wages Register: A record of wages paid to employees, including details of salary, overtime, allowances, deductions, etc.
- Accidents Register: This register is maintained to record any accidents or incidents that may have occurred on the business premises, involving employees. It includes details such as the date of the incident, nature of the injury, and action taken.
- Monthly Returns and Challans: Monthly returns, including the Employer's Contribution and Employee's Contribution, need to be filed along with the corresponding challans (payment receipts) for the contributions made.
FAQs
Employees with a gross salary of up to ₹21,000 per month are eligible for ESI coverage.
The ESI contribution is 6.5% of the employee's gross salary, with the employer contributing 4.75% and the employee contributing 1.75%.
ESI benefits include free medical care, cash benefits for sickness and maternity, disability benefits, and dependent benefits in case of an employee's death.
You can register for ESI online by visiting the official ESIC website, filling out the registration form, and submitting the required documents.
ESI is applicable to employees earning up to ₹21,000 per month. Employees earning above this threshold are exempt from ESI coverage.
Documents such as the registration certificate, address proof, PAN card, bank statement, and other relevant documents specific to your organization may be required for ESI registration.
ESI returns need to be filed biannually, typically for the periods of April to September and October to March.
Non-compliance with ESI regulations can result in penalties, fines, and legal consequences. It is essential to meet the obligations to avoid such issues.
No, the employer is responsible for paying the ESI contribution on behalf of the employee and cannot deduct it from the employee's salary.
No, only employees registered under the ESI scheme are eligible to avail of its benefits. It is important to complete the registration process to ensure coverage and access to ESI benefits.
An OPC can engage in any lawful business activity specified in its Memorandum of Association (MOA).
Yes, OPCs can raise funds through venture capital, angel investors, or other funding sources, subject to compliance with applicable regulations.
No, an OPC cannot be converted directly into a public limited company. It can only be converted into a private limited company.
No, a person can be a director in only one OPC at a time.
Yes, OPCs can avail tax benefits and incentives applicable to small businesses, subject to meeting the eligibility criteria.