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The Employee’s State Insurance (ESI) is an autonomous entity operating under the Ministry of Labour and Employment, Government of India. It serves as a self-sustaining social security and health insurance program aimed at providing support to Indian workers.
Benefits of the ESI Registration Scheme for Employees
This scheme offers comprehensive medical coverage to employees registered under the ESI Act, 1948, during periods of incapacity, facilitating their recovery and return to work. It also provides financial assistance to offset wage loss during times of absence due to illness, maternity, or work-related injuries. Furthermore, the medical claims extend to family members of the insured employee.
Who Needs ESIC Registration?
Mandatory ESI Registration applies to every factory and specified establishment with 10 or more permanent employees whose wages fall below ₹21,000 per month.
Employer’s Obligation to Register
Yes, it is legally required for employers under Section 2A of the Act, in conjunction with Regulation 10-B, to register their factory or establishment under the ESI Act within 15 days from when it becomes applicable.
Definition of Establishment
As defined by the notification from the relevant government authority (Central/State) under Section 1(5) of the Act, the following types of establishments employing 10 or more individuals must comply with ESI registration:
- Shops
- Hotels or restaurants without manufacturing operations, solely engaged in sales
- Cinemas, including preview theaters
- Road motor transport establishments
- Newspaper establishments not classified as factories under Section 2(12)
- Private educational institutions operated by individuals, trusts, societies, or other organizations, and medical institutions, including hospitals, nursing homes, diagnostic centers, and pathological labs, whether corporate, joint sector, trust-based, or privately owned.
Penalties for Non-compliance
Employers failing to obtain ESIC registration or neglecting the ESI return filing process may face fines of ₹10,000.
ESI Contributions from Employers and Employees
Employers are required to contribute 3.25%, while employees contribute 0.75% of their monthly wages. Thus, the total ESI contribution is 4%, broken down as follows:
- Employee: 0.75%
- Employer: 3.25%
ESI Return Filing Requirements
All businesses with ESIC Registration must regularly file ESI returns. The return types and their schedules are as follows:
ESI Returns | Frequency | Due Date |
---|---|---|
Form 5 | Half-Yearly | 11th November (April to September), 11th May (October to March) |
Form 1A | Annually | 31st January |
ESI Registration Process
- Upload the necessary documents on our web portal.
- Select the suitable package and make the payment using various available options.
- Once the order is placed, your application will be assigned to a dedicated professional.
- The professional will complete the required ESI registration form.
- After verification, the ESI registration form will be submitted.
- Upon creation of the ESI account, the registration certificate will be sent to you.