D M & Associates

Employee State Insurance (ESI) is governed by the ESI Act, 1948, a self-financing social security scheme and health insurance plan for the Indian workers. ESIC manages the fund required as per the rules and regulations set by the Act. It is an autonomous corporation managed by Employees State Insurance Corporation (ESIC) under the Ministry of Labour and Employment.

According to the Act, ESI is mandatory for business entities employing 20 0r more individuals, also employees earning not more than Rs. 15,000 monthly need to contribute 1.75% of their pay towards the ESI contribution, whereas 4.75% will be contributed towards their ESI by the company, the total share being 6.5 percentages.

The ESI scheme provides various benefits to the employees, has a large network of dispensaries, and hospitals nationwide run by the concerned state governments for facilitating speedy and efficient medical care. In addition, to the medical care, insured persons also benefit the sick pay benefits. Registration with ESI also improves worker morale and ensures employee retention.

• Provides complete medical care benefits.
• Includes dependants (family members).
• It can be used at different ESI dispensaries nationwide.
• Payments made will be reimbursed.
• Access to all the medical care in ESI Dispensaries/Hospitals.

The following establishments employing 10 or more persons attract ESI contribution;

• Shops
• Restaurants
• Theatres
• Roadside Motor Transport Establishments
• News paper establishments
• Medical Institutions
• Private Educational Institutions

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

The following documents are required for registration:

• The registration certificate or license obtained under Shops and Establishment Act/Factories Act;
• MOA and AOA, or partnership deed (based on the type of entity);
• Registration Certificates of all entities and commencement of production for factories;
• list of employees with their monthly compensation;
• list of directors, partners and shareholders of the company;
• PAN card of the business and address proof;
• Bank statements, with the proof of commencement of operation.

1. The company can apply for registration by submitting the Employer’s Registration Form (Form-1).
2. Fill the form and submit it to ESIC for registration on the official website.
3. The registration number i.e. a 17-digit unique identity will be provided to the company after verification. The filings can be done once the 17-digit number is received.
4. Once the submission of form with photographs and details of family members is done by the employees, Employees registered under the scheme are rewarded with an ESI card.
5. The ESI registration is permanent, and the 17-digit number being valid for a lifetime, new changes, such as employee additions in the organizations, needs to be stated to the ESI.

For filing ESI returns, the following documents must be maintained regularly;

• Attendance registers
• Form 6 registers
• Wages registers
• Registers for any accidents in the establishments/premises
• Inspection books
• Monthly challans and the returns submitted.

ESI returns are to be filed half yearly. It can be done through the ESIC’s online portal.

1. Once logged in, a list of activities or changes or additions that can be made is displayed in the ESI account. For instance, one can update the employee details, report an accident; etc.
2. Before filing the monthly contributions, ensure that all the employee details are latest and thus, updated. If not, the details can be edited.
3. Submit the bank details and file the monthly ESI contribution.
4. After the payment of the contributions, generate challan and the same will be received. The challan is an important document that has to be filed for inspection.