ESIC Registration – Process, Benefits, Documents Required

What is ESIC?

ESIC stands for Employees’ State Insurance Corporation, a statutory body registered under the Employees’ State Insurance Act, 1948. ESIC is an insurance scheme that covers employees who earn wages upto Rs.21000 oer month and work in factories, hotels, shops, restaurants, road transport, cinemas, newspapers, educational institutions and private institutions. It also covers trainees and apprentices employed under certain conditions.

What is the Eligibility for ESIC Registration?

Any non-seasonal factory or establishment having more than 10 employees (in some states, this threshold is 20 employees) who have a maximum basic salary upto Rs.21,000 per month (Rs.25,000 per month for persons with disability) can be covered under the ESIC scheme. Therefore, they have to mandatorily register with ESIC within 15 days from the applicability date.

Under this scheme, the employer contributes 3.25% of the monthly wage payable whereas, the employee contributes 0.75% of the monthly wage. However, employees having a daily wage of less than Rs.176 per day, are not required to provide their contributions.

Which Entities are Covered Under ESIC?

The following entities under State Government are covered under the ESI act, as per section 1(5) of the ESI Act.

• Shops.
• Restaurants or hotels only doing sales.
• Cinemas including preview theatres.
• Road motor transport establishments.
• Newspaper establishments (which is not covered under the Factory Act).
• Private medical institutions.
• Private educational institutions.
• Casual employees of Municipal Corporation or Municipal Bodies

If the above-mentioned entities have an employee strength of more than 10 persons, there employer has to compulsorily register the entity under ESIC.

The following entities under Central Government are also eligible under the ESI Act.

• Shops
• Hotels and restaurants
• Road motor transport establishments
• Cinema including preview theatres
• Newspaper establishments
• Establishments engaged in:
  • Insurance business
  • Non-Banking Financial Companies (NBFCs)
  • Port trust
  • Airport authorities
  • Warehousing

If the above-mentioned entities have an employee strength of more than 20, they are mandatorily required to register themselves under ESI Act.

What are the Benefits of ESIC Registration?

Registering under ESIC has various benefits. Some of them are listed below -

• Sickness benefit - These benefits are provided @70% of total wages for a maximum period of 91 days in an year in the case of a certified illness.
• Extended Sickness - Provides benefits upto 2 years to the employees in case of malignant or long-term diseases @80% of wages.
• Enhanced Sickness benefits - Provides benefits equal to full wages for employees undergoing sterlization for family planning upto 7 days for vasectomy and 14 days days for Tubectomy.
• Medical Benefits to an Employee - It provides medical benefits to the employee and his/her family members.
• Medical Benefits to Retired Employees - It provides medical benefits to retired employees and their spouses upon making a payment of of an annual premium of Rs.120.
• Maternity Benefit - It provides manternity benefit at full rate to the pregnant women (which includes 26 weeks of paid leave that can be extended by 1 month).
• Dependant Benefit - If the death of an employee takes place due to an injury during employment or occupational hazards, a benefit of 90% of the wages is given to his/her dependants after the employees’ death.
• Temporary Disablement Benefits - Benefit upto 90% of wages in case of employment injury is provided till the time the disability continues.
• Permanent Disablement Benefits - Benefits upto 90% of wages is provided every month depending on the extent of loss of earning capacity certified by a medical board.
• Funeral Expenses - Rs.15,000 is given to the dependants of the employees or the person who does the employee’s last rites.

What is the Registration Process of ESIC?

ESIC registration can be completed online. Given below are the integral steps involved in ESIC registration -

• Step 1. Login to ESIC portal - An employer must register himself at the ESIC portal.
  Registration can be done on the ESIC portal by clicking on the ‘Employer login’ option on the screen.
  
  
  • On the next page, click on ‘sign up’ button.
  
  • Fill in the details required and click on ‘Submit’ to submit the form.
  
• Step 2. Confirmation Mail - After submitting the sign up form, the employer receives a confirmation mail sent to the registered email ID and mobile number entered at the time of signing up.
  The email contain the username and password details that has to be used for registering as an employer and employee. Here’s a sample of the conformation mail you will receive.
  
  
• Step 3. Employer Registration Form-1 - Click on ‘Employer Login’ and login to the ESIC portal. Enter the username and password received in the email. You will be redirected to the page with the option ‘New Employer Registration’.
  
  
  
  Now, select the ‘Type of unit’ from the dropdown list and click ‘submit’.
  
  
  
  Next, you need to fill in the required details in ‘Employer Registration - Form 1’.
  
  
  
  The employer needs to enter details like the unit of the employer, employer details, factory/establishment details, and employee details. Once, the complete form is filled, he/she needs to click the ‘submit’ button.
• Step 4. Payment for Registration - Once you submit the ESIC registration Form 1, you can see a message on the screen asking for payment of advance contribution. Click on the ‘Pay initial contribution’ link.
  
  
  
  The initial contribution amount will be displayed. Select the ‘online’ option and click on ‘submit’ button.
  
  
  
  The challan number is displayed on the screen. Note down the challan number and click on ‘continue’ button.
  
  
  
  The ‘payment gateway’ page opens. Now, the employer needs to select the mode of payment and fill the amount that has to paid.
• Step 5. Registration Letter - After paying the six month advance contribution, a system generated registration letter C-11 is mailed to the employer. This email contains the 17-digit registration number by the ESIC department. C-11 is a valid proof of the employer’s registration.
  Given below is a sample of registration letter, C-11.
  
  

What are the Documents Required for ESIC Registration?

The ESIC registration process is completely online. Therefore, the employer is not required to submit any physical documents. Given below is a list of the documents required to be submitted while filing GST registration form online -

• Registration Certificate under either the Factories Act or Shops and Establishment Act.
  Certificate of incorporation for the establishment, including:
  • Company Registration Certificate for a company.
  • Partnership deed for a partnership firm.
  • GST registration certificate for the establishment.
  • Memorandum of Association and Articles of Association for the company.
• Address proof for the establishment, which can be one of the following:
  • Utility bills (electricity, gas, or telephone bill not older than three months)
  • Rental agreement for the establishment’s land
  • Property tax receipts for the establishment’s land
• Employee details:
  • List of all employees working in the establishment
  • PAN Card of the establishment and its employees
  • Compensation details for all employees
  • Attendance register for employees
• A cancelled cheque from the company’s bank account.
• List of company directors.
• List of company shareholders.

What Compliances are Required After ESIC Registration?

The entity needs to maintain the following compliances after successfully registering with ESIC -

• Maintain the attendance register.
• Maintain a register of wages for workers
• Inspection book
• Monthly return and challan by 15th of the succeeding month.
• Maintain a register for maintaining the record of any accident that happened on the premises.

Which Returns are Required to be Filed After ESIC Registration?

ESIC registered entities are required to file half-yearly returns. You need the following documents for filing the returns -

• Register of employees attendance
• Form 6 - Register
• Register of wages
• Register of accidents that took place on the premises.
• Monthly returns and challans.

Hope this article helped you learn about ESIC benefits and compliance requirements in detail. If you need help with GST registration or GST filing, get in touch with our tax experts who can help you ensure compliance. Book an online CA now!