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ESI Registration & Filing

ESIC (Employee State Insurance Corporation) registration is a mandatory process in India that employers need to undertake to provide social security benefits to their employees. ESIC is a comprehensive health insurance and social security scheme designed for the workforce. Through ESIC registration, employers contribute a percentage of the employee’s salary to the ESIC fund, and in return, employees become eligible for various benefits, including medical care, sickness benefits, maternity benefits, and disability benefits.

To register for ESIC, employers need to submit the required documents and details of their employees to the local ESIC office. Once registered, employers are issued a unique employer code, and employees receive an ESIC card. Employers deduct the employee’s share of the contribution and deposit both the employer and employee contributions with the ESIC fund monthly.

ESIC registration is essential for employers to comply with labour laws and provide employees with social security coverage. It ensures that employees have access to healthcare services and financial support in times of need. Non-compliance with ESIC registration can result in penalties and legal consequences for employers.

ESI Scheme

ESI (Employee State Insurance) operates following the ESI Act of 1948. It is a government scheme designed to provide social security benefits to workers. The administration of this scheme falls under the purview of the Employee State Insurance Corporation (ESIC). Employers must formally register their establishments with ESIC and furnish worker details for inclusion in the program.

Complying with the intricate regulations stipulated by the government can pose a significant challenge for employers. FinHub Advisors Pvt Ltd ESI experts are available to assist you with these matters.

Definition and Scope of Establishments Under the ESI Act

The Employee State Insurance (ESI) Act categorises an establishment as any organised entity involving men or women, regardless of its physical location. This includes retail outlets and commercial shops, which are mandated to enroll in the ESI scheme if they employ 10 workers or 20 in certain states, provided these employees earn up to Rs. 21,000 per month, or Rs. 25,000 for individuals with disabilities.

Who is eligible for ESI Registration?

According to the official notice, the following state government-affiliated entities fall under the scope of the ESI Act according to Section 1(5):

• Retail outlets
• Dining establishments or hotels solely involved in sales
• Movie theatres, including preview facilities
• Establishments related to road transportation
• Newspaper organisations (exempt from the Factory Act)
• Private healthcare facilities
• Private educational institutions
• Casual workers employed by Municipal Corporations or Bodies

These entities are required to register with the ESIC if they have a workforce of 10 or more individuals.

Furthermore, the Central Government has expanded the ESI Act’s Section 1(5) coverage to include the following central government-related entities:

• Retail outlets
• Hotels and dining establishments
• Establishments related to road transportation
• Cinemas, including preview theatres
• Newspaper organisations
• Businesses involved in:
  1. Insurance
  2. Non-Banking Financial Companies (NBFCs)
  3. Port trusts
  4. Airport authorities
  5. Warehousing

For these central government-associated entities, mandatory ESIC registration is required when employing 20 or more individuals.

Eligibility criteria for ESI registration

The eligibility criteria for ESI registration are as follows:

• Employees in establishments, factories, or shops with more than 10 employees are eligible for ESI benefits under Section 2(12) of the ESI Act, 1948.
• All workers and their dependents across various industries and sectors can receive ESI medical benefits from ESIC-run hospitals and dispensaries.

Women employees earning less than Rs. 21,000 per month and individuals with disabilities earning less than Rs. 25,000 per month are eligible for maternity benefits under the ESI Act. This includes medical and cash benefits, as well as paid leave for various conditions such as pregnancy (pre and post-delivery), medical termination, miscarriage, and adoption.

Advantages of ESIC Registration

ESIC registration offers employees a comprehensive suite of benefits, safeguarding their health, income, and family. Key benefits include:

• Sickness Benefit: Employees are entitled to receive 70% of their wages for up to 91 days a year during certified sickness periods.
• Extended Sickness Benefit: Employees can receive an extended benefit at 80% of their wages for up to two years for certain long-term and severe diseases.
• Enhanced Sickness Benefit: Full wage compensation is provided for employees undergoing sterilization, with 7 days for Vasectomy and 14 days for Tubectomy.
• Medical Benefits: Comprehensive medical care is available to employees and their families, ensuring their well-being.
• Retired Medical Benefits: Retired employees and their spouses are eligible for continued medical benefits upon paying an annual premium of Rs. 120.
• Maternity Benefit: Pregnant women are entitled to total wages as maternity benefits for 26 weeks, extendable by a month, ensuring financial stability during childbirth.
• Dependents’ Benefit: In the unfortunate event of an employee’s death due to employment injury, 90% of the employee’s wages are provided to their dependents as a monthly payment.
• Temporary Disablement Benefit: Employees suffering from an employment injury receive 90% of their wages as a benefit until the disability lasts.
• Permanent Disablement Benefit: In cases of permanent disability, employees are entitled to a monthly payment of 90% of their wages based on the loss of earning capacity as assessed by a Medical Board.
• Funeral Expenses: A fixed sum of Rs. 15,000 is provided to the dependents or the individual conducting the last rites, assisting with funeral expenses.

Documents Required for ESI Registration

The following documents are required for ESI (Employee State Insurance) Registration, and they should be provided in digital or electronic format for online registration on the ESIC website.

For the online ESIC registration process, businesses are not required to submit physical documents. The necessary documents to be uploaded during the online registration include:

• Business Registration Proof: One of the following based on the business type:
• Factories Act Registration Certificate.
• Shops and Establishment Act Registration Certificate.
• Establishment Incorporation Certificate, applicable as per the entity type:
• Company Registration Certificate for companies.
• Partnership deed for partnership firms.
• Goods and Services Tax (GST) Registration Certificate of the establishment.
• Company’s Founding Documents:
• Memorandum of Association (MoA).
• Articles of Association (AoA).
• Establishment’s Address Proof: One of the following can be provided.
• Recent utility bill (electricity, gas, or telephone not older than three months).
• Rental agreement for the establishment’s premises.
• Property tax receipt for the establishment’s location.
• Employee Details: A comprehensive list of all employees at the establishment.
• PAN Cards: PAN details of the business and all employed individuals.
• Employee Compensation Details: Information on the salary/wages of all employees.
• Banking Information: A cancelled cheque from the company’s bank account.
• Company Leadership Details:
• List of the company’s directors.
• List of the company’s shareholders.
• Employee Attendance Register: Maintaining a record of employee attendance.

Compliances After ESIC Registration

After ESI (Employee’s State Insurance) registration, an establishment must adhere to specific compliances and file requisite ESI returns. These obligations are crucial for ensuring seamless operation and adherence to regulatory standards. The mandatory compliances include:

• Attendance Register Maintenance: The establishment must diligently maintain an attendance register to record the attendance of all employees. This serves as a fundamental document for compliance and internal record-keeping.
• Register of Wages: A comprehensive register of wages for workers should be meticulously maintained. This register is vital for transparent documentation of salary details and ensures compliance with ESIC regulations.
• Inspection Book: An inspection book must be kept to record any inspection on the premises. This facilitates transparency and regulatory compliance during official inspections.
• Monthly Return and Challan Submission: The establishment must submit monthly returns and challans within the first 15 days of the succeeding month. This includes providing details of employees, their attendance, and the corresponding contributions to the ESIC.
• Accident Register: A register documenting accidents on the premises is mandatory. Accurate recording of accidents is essential for compliance. It facilitates a proactive approach towards workplace safety.

ESIC Registration Process

The process for ESIC registration has shifted from a manual to a completely online system, making it more accessible and efficient. Businesses looking to register under ESIC can now complete the entire process through the official ESIC portal. For those who find navigating online registration a challenge, FinHub Advisors Pvt Ltd offers expert assistance. Our team is well-versed in the intricacies of the ESIC online portal and can guide you through each step, ensuring a smooth and successful registration for your business.

Why Choose FinHub Advisors Pvt Ltd for ESI registration?

FinHub Advisors Pvt Ltd team of seasoned professionals, including chartered accountants and legal experts, offers premier legal and compliance services in India. We recognize the critical nature of an employer’s obligation to file ESI returns and approach this task with the highest degree of diligence and attention to detail. Our process for filing your ESI returns is streamlined, efficient, and designed to save you time. Transparency is at the core of our service delivery, ensuring you receive regular updates throughout the process. Should you have any inquiries during the ESI registration or filing process, our expert team is readily available to provide you with the necessary support and guidance.

ESIC Return Filing

ESIC (Employee State Insurance Corporation) return filing is a crucial process for employers in India to comply with the regulations and ensure that their employees receive the benefits entitled under the ESIC scheme. ESIC return filing involves the submission of detailed information about the employees and the contributions made by both the employer and the employees to the ESIC fund. Here’s a detailed overview of ESIC return filing:

• Frequency of Filing: Employers are required to file ESIC returns on a monthly basis.
• Components of the Return: The ESIC return typically includes details of the employees, their wages, and the contributions made during the specified period. Employers need to provide accurate and updated information to ensure compliance
• Form Generation: Employers can generate the ESIC return form through the official ESIC portal or through the ESIC’s electronic Challan cum Return (ECR) portal. The form captures details such as the employee’s name, insurance number, wages, and the corresponding employer and employee contributions.
• Verification and Submission: Once the ESIC return form is generated, employers need to verify the details and ensure accuracy. After verification, the form is submitted electronically through the designated portal.
• Challan Generation and Payment: Along with the ESIC return, employers are required to generate a Challan for the corresponding ESIC contributions. The employer’s and employee’s shares of the contributions are deposited with the ESIC fund. Payment can be made online through the portal.
• Acknowledgment: After successful submission and payment, employers receive an acknowledgment of the ESIC return filing. This acknowledgment serves as proof of compliance.
• Consequences of Non-Compliance: Non-compliance with ESIC return filing may lead to penalties and legal consequences. Employers may face fines and could be liable for providing any missed benefits to the employees.

ESIC return filing is an integral part of the ESIC compliance process, ensuring that employees receive the benefits they are entitled to under the social security scheme. Employers are encouraged to stay updated on the ESIC regulations and deadlines to avoid any legal repercussions and to contribute to the welfare of their workforce. Utilizing the online portals provided by ESIC streamlines the process and enhances accuracy in return filing.

Documents Required for ESI Return Filing

• Employee Details
• Wage Details
• Contribution Details
• ESIC Challan Copies
• Acknowledgment of Previous Returns
• ESIC Return Form
• Digital Signature Certificate (DSC)
• Bank Statement
• Registration Certificate
• Any Relevant Correspondence