ESI Registration

What is ESI Scheme?

The Employees' State Insurance (ESI) Scheme is a government-run program designed to provide social security and healthcare benefits to employees, especially those working in factories, industries, and other establishments. It's meant to protect workers from financial hardship in case of sickness, accidents, or even death, making sure they have access to medical care and compensation when they need it most. 

Why Registering for ESI is Important?

Registering under the ESI Scheme is essential for both employers and employees. It ensures compliance with the law and enables access to the scheme’s benefits and protections. The key reasons why registration matters are: 

For Employers 

• Legal Compliance: Registration is mandatory under the ESI Act for employers with eligible establishments. Non-compliance can lead to penalties, interest, or even prosecution. 
• Cost Sharing: ESI allows employers to share the burden of healthcare costs with employees and the government, reducing direct medical liabilities. 
• Workplace Reputation: Being ESI-compliant enhances your company's image as a responsible and caring employer. 
• Employee Retention & Productivity: Access to health benefits increases employee satisfaction and reduces absenteeism, helping maintain a stable workforce. 

For Employees 

• Access to Benefits: Registered employees can receive ESI benefits like free medical care, maternity benefits, sickness leave, and disability or dependent support. 
• Financial Protection: ESI safeguards employees from unexpected medical expenses and loss of wages due to illness or injury. 
• Proof of Coverage: Registration provides a unique ESI ID and Pehchan card, essential for accessing ESI services. 
• Social Security: Offers long-term security, contributing to the employee’s peace of mind and overall well-being. 

Benefits of ESI Registration 

Under Section 46 of the ESI Act, 1948, the insured person and their dependents are entitled to the following benefits under this Act: 

1. Medical Benefit: Full medical care for insured persons and their families, with no treatment ceiling. Retired and disabled insured persons pay Rs.120 annually for continued care. 

2. Sickness Benefit (SB): 70% of wages for up to 91 days of sickness with 78 days of contributions in 6 months. 

• Extended Sickness Benefit (ESB): Up to 2 years for certain diseases at 80% wages. 
• Enhanced Sickness Benefit: Full wages for sterilization (7 days for vasectomy, 14 days for tubectomy). 

3. Maternity Benefit (MB): Full wage for 26 weeks, extendable by 1 month on medical advice, with 70 days of contributions. 

4. Disablement Benefit: 

• Temporary Disablement Benefit (TDB): 90% wages from day one for work-related injuries. 
• Permanent Disablement Benefit (PDB): 90% wages monthly based on loss of earning capacity. 

5. Dependants Benefit (DB): 90% of wages paid to dependents if the insured person dies from a work-related injury. 

Other Benefits: 

• Funeral Expenses: Rs.15,000/- for last rites. 
• Confinement Expenses: Paid for delivery outside ESI facilities. 

Other Need-Based Benefits Under ESI 

• Vocational Rehabilitation: Training support for permanently disabled insured persons at Vocational Rehabilitation Centres (VRS). 
• Physical Rehabilitation: Treatment and support for those physically disabled due to employment-related injuries. 
• Rajiv Gandhi Shramik Kalyan Yojana: Unemployment allowance of 50% wages (up to 2 years) for insured persons who lose jobs due to factory closure, retrenchment, or 40%+ permanent disability. 
• Medical Benefits under RGSKY: Medical care for the insured person and family during the unemployment allowance period under the Rajiv Gandhi scheme. 
• Skill Training under RGSKY: Free vocational training with travel allowance during unemployment, covered by ESIC. 
• Atal Beemit Vyakti Kalyan Yojana (ABVKY): One-time unemployment relief of 50% of wages for up to 90 days for insured persons under Section 2(9) of the ESI Act, 1948, with at least 1 year of coverage and 78 days of contribution in the last 12 months. 
• ABVKY Claim Process: Claims can be submitted online or directly to the ESIC branch office after 30 days of unemployment. 
• Incentive for Hiring Persons with Disabilities: ₹25,000 wage limit for ESIC coverage, with the Central Government paying the employer’s share for 3 years. 
• Need-Based Benefits Model: Contributions are fixed based on wages, but benefits are provided based on individual need. 
• Cash Benefit Disbursement: All monetary benefits are paid through ESIC Branch or Pay Offices based on eligibility and contribution status. 

Key Details for ESI  

1. Parties Involved 

• Insured Persons (IPs): These are the employees covered under the ESI scheme who are entitled to various benefits, such as medical care, sickness, maternity, and disability benefits. 
• Employers: The entities required to register with ESIC and contribute to the ESI fund for the welfare of their employees. 

2. Eligibility

Establishments with 10 or more employees (threshold may vary by state) must register under the ESI Act. 

3. Timeline

• Registration approval generally takes 7 to 15 working days after submission and payment. 
• May extend up to 30 days depending on verification. 

4. Compliance Requirements 

• Employers must submit monthly returns and pay contributions regularly via the ESIC portal. 
• Maintain accurate employee records including wages and attendance. 
• Register new employees within 10 days of joining. 

5. Payment Due Date

Ensure monthly contributions are paid by the 15th of the month. 

6. Cost and Contributions 

• No fee for registration itself. 
• Employers pay 3.25% of wages as contribution; employees pay 0.75%. 

Eligibility Criteria for ESI Registration 

1. For Employers

The ESI scheme applies to factories and establishments with 10 or more employees. 

2. For Employees

It covers employees whose monthly wages do not exceed Rs.21,000 (Rs.25,000 for persons with disabilities). 

Who Needs to Register

The table below shows which entities need to register for the Employees' State Insurance (ESI) scheme based on their affiliation and the number of employees. State Government entities with 10 or more employees, and Central Government entities with 20 or more employees, must register. 

Procedure to Register for Employee State Insurance Scheme 

Step 1: Sign Up on ESIC Portal 

• Go to the official ESIC website. 
• Click on ‘Employer Login’ and then click ‘Sign Up’. 
• Fill in your business details and submit. 

Step 2: Get Login Details by Email 

• You will receive a confirmation email and SMS with your username and password. 

Step 3: Fill Employer Registration Form (Form-1) 

• Log in using the details received. 
• Click on ‘New Employer Registration’. 
• Select your Type of Unit (factory/shop etc.) and fill Form-1 with employer details, establishment details, employee details 
• Submit the completed form. 

Step 4: Make Payment 

• After submitting Form-1, click on ‘Pay Initial Contribution’. 
• Pay the advance contribution (6 months) using the online payment gateway. 
• Note down your challan number. 

Step 5: Receive Registration Letter (C-11) 

• Once payment is successful, you’ll get a Registration Certificate (C-11) via email. 
• This includes your 17-digit ESIC Registration Number, which serves as proof of registration. 

Step 6: Register Employees 

Add employees to the ESIC portal to generate their Insurance (IP) Numbers. 

Step 7: Start Contributions 

Begin monthly contributions (Employer: 3.25%, Employee: 0.75%) by the 15th of each month. 

Documents Required for ESI Registration 

The ESI registration process is entirely online, so no physical documents are needed. You just need to upload the following: 

• Registration Certificate: Under Shops & Establishment Act or Factories Act  
• Certificate of Incorporation or Partnership Deed 
• GST Registration Certificate 
• MoA & AoA. 
• Address Proof: Utility bill, rent agreement, or property tax receipt. 
• Employee Details: List of employees with PAN and salary info 
• Bank Details: Cancelled company cheque 
• Director/Shareholder List 
• Employee Attendance Register 
• PAN Card of the business and employees 

Process for Paying Monthly ESI Contribution 

Employers registered under the ESIC are required to file and pay ESI contributions for all eligible employees on a monthly basis and file returns by the 15th of each month. This process is completed online through the ESIC portal, ensuring timely compliance with statutory obligations under the ESI Act.  

Below is a step-by-step guide for paying monthly ESI contributions: 

• Access ESIC Portal: Visit https://www.esic.gov.in and log in with employer ESIC User ID and Password. 
• File Monthly Contribution: Go to Online Monthly Contribution Screen, enter or upload the contribution details. 
• Submit Contribution: Review and click Submit. 
• Make Payment: Click “Pay Online”, proceed with SBI Net Banking and complete the payment. 
• Generate Challan: After payment, click “Generate Challan”, select the record, and click Submit. 
• Verify & Reprint Challan: Use “Online Challan Double Verification”, enter the Challan number, and reprint. 

Employers must file a NIL Declaration, even if there are no employee contributions for a particular month 

Post-Registration: ESI Return Filing and Compliance 

ESI returns need to be filed monthly and twice a year by all companies registered under the ESI scheme. This can be done easily online using Form 5, or if needed, you can submit it manually at the nearest ESI office. 

Know the Law

In India, ESI registration is governed by the Employees' State Insurance Act, 1948 (Sections 2A, 46, 73, 84). The scheme is managed by the Employees' State Insurance Corporation (ESIC) under the Ministry of Labour and Employment.

Consequences of Breach

If someone commits an offence under the ESI Act (Section 84,85, 86), the consequences may include: 

• Legal Action: Offender can face imprisonment or fines for failing to pay contributions or making false statements. 
• Fines: Employer may be fined for failing to pay contributions or obstructing officials. 
• Damages: The Corporation can impose penalties up to the arrears due. 
• Repeat Offence Penalty: Repeat offenders face enhanced punishment, including higher fines and longer prison terms. 
• Court Orders: The court may order employers to pay due contributions or face additional penalties. 

Do’s and Dont’s of ESI Registration

Why Choose DigiLawyer for ESI Registration?

At DigiLawyer, we simplify ESI (Employee State Insurance) Registration for businesses, ensuring 100% compliance with ESIC regulations while saving you time, effort, and penalties. Our expert-guided process makes registration effortless, whether you're a startup, SME, or large enterprise.

FAQ’s Related to ESI