May 7, 2019

ESI Registration

Employee State Insurance Registration

Mandatory for all companies with > 10 employees (Duration 2-8 days)

Documents Required For ESI Registration

To be Submitted by Employer :

  • Registration Certificate or Licence issued under Shops and Establishment Acts or Factories Act.
  • Address Proof: Latest Rent receipt of the premises you are occupying indicating the capacity in which the premises are occupied, if applicable.
  • Latest building Tax/Property Tax receipt (Photocopy).
  • Memorandum and Articles of Association/Partnership Deed/Trust Deed depending on the entity that is applying for registration.
  • Photocopy of certificate of Commencement of production and/or Registration No. of CST/ST (or GST once it becomes applicable).
  • Copy of PAN Card
  • Evidence in support of the date of commencement of production/business/first sale (e.g. Copy of First Invoice).
  • Month wise employment position, salary etc.
  • Copy of bank statement

To be Submitted by Employees :

  • Family Photo in Duplicate

Applicability of ESIC Registration

The following establishments employing 10 or more persons attracts ESI coverage :

  • Shops
  • Hotels or restaurants not having any manufacturing activity, but only providing service.
  • Cinemas
  • Roadside Motor Transport Establishments
  • News paper establishments
  • Private Educational Institutions and Medical Institutions

In some states the minimum employees required for coverage is for 20 or more. A few State Governments have not extended scheme to include Medical & Educational Institutions.

 

Concerns Related to ESIC Registration

  1. The ESI scheme is a self-financing scheme from the contributions. The ESI funds are primarily built out of contribution from employers and employees monthly at a fixed percentage of wages paid. The State Governments also contributes 1/8th share of the cost of Medical Benefit.
  2. The following establishments employing 10 or more persons attracts ESI coverage:
    • Shops
    • Hotels or restaurants not having any manufacturing activity, but only providing service
    • Cinemas
    • Roadside Motor Transport Establishments
    • News paper establishments
    • Private Educational Institutions and Medical Institutions
  3. In some states the minimum employees required for coverage is for 20 or more. A few State Governments have not extended scheme to include Medical & Educational Institutions.
  4. Any sum deducted from wages under the ESI Act will be deemed to have been entrusted to the employer by the employee for the purpose of paying the contribution for which it was deducted. Non-payment or delayed payment of the Employee’s contribution after being deducted from the wages of the employee amounts to ‘ Breach of trust’ and is a criminal offence punishable under Section 406 of IPC.

In some states the minimum employees required for coverage is for 20 or more. A few State Governments have not extended scheme to include Medical & Educational Institutions.

 

Steps for ESIC Registration

  • Step 1 Getting ESI Registration :

Establishments Factories must get themselves registered within 15 days of the Act becoming applicable to them by submitting an Employer’s Registration Form (Form-01) to the relevant Regional Office.

  • Step 2 Obtaining Code Number :
    A 17-digit identification number called the Code number will be provided which must be used in all Correspondence relating to the Scheme. Form 3 (Return on Declaration) must also be submitted along with Form 1.
  • Step 3 For Employees :
    At the time of joining the insurable employment, employees are required to fill in aDeclaration Form (Form1) and submit two copies of a family photo to the employer, which must be submitted to the relevant ESI Branch Office by his employer.
  • Step 4 Insurance Number :
    The employee will then be allotted an insurance number for the purpose of his identification under the scheme.
  • Step 5 Temporary Identity Card :
    The employees will also be issued a temporary identity card for availing medical benefit for him/herself and his/her family for a duration of three months.
  • Step 6 Permanent Photo Identity Card :
    Thereafter, he will be provided with a permanent photo identity card. A person once registered need not register again when there is a change of employment. The same registration can be transferred from one employment to another.