Registration of Employees' State Insurance Corporation (ESIC)

At A2Z FINEDGE, we are committed to providing end-to-end taxation compliance and filing services. With a team of highly qualified professionals, including Chartered Accountants (CA), Company Secretaries (CS), MBAs, Lawyers, and Advocates, we ensure seamless compliance solutions for your business. One of our key offerings is ESIC Registration, a crucial requirement for employers to provide social security benefits to their employees.

What is ESIC ?

ESIC stands for Employees' State Insurance Corporation, a statutory body under the Ministry of Labour and Employment, Government of India. It is responsible for administering the Employees' State Insurance (ESI) Act, 1948, which provides social security and health insurance benefits to Indian workers and their families in case of sickness, injury, maternity, and other specified benefits.

Both the employer and employee contribute to the ESIC fund. The contribution rate is typically 0.75% of the employee's wages (up to a certain limit) paid by the employee, and 3.25% paid by the employer, totalling 4% of the wages.

Benefits of ESIC Registration

Eligibility Criteria for Application

·         Employee Coverage:

Mandatory for employees earning a monthly wage of ₹21,000 or less (₹25,000 for persons with disabilities).

·         Employer Coverage:

Applicable to establishments employing 10 or more employees (threshold may vary by state).

·         Voluntary Registration:

Establishments not meeting the mandatory criteria can opt for voluntary registration.

Document Requirements for Registration

To initiate ESIC registration, you will need the following documents:

§  Proof of Business Registration:

Certificate of Incorporation, partnership deed, or other registration documents

§  Details of Employees:

Name, Aadhaar card, and salary details of each employee

§  Address Proof of Business Premises:

Utility bill, property tax receipt, or rental agreement

§  Bank Account Details:

Copy of a cancelled cheque or passbook of the organization's primary bank account

§  Employer’s PAN Card and Aadhaar Card:

For verification of the employer's identity

§  Factory/Shop Establishment License:

If applicable, a valid license under local laws

§  Attendance Register:

A maintained record of employee attendance

§  Monthly Wage Register:

Documentation showing wages paid to employees

§  Digital Signature Certificate (DSC):

For online filing and authentication of documents

Registration Process of ESIC Registration

To register for the Employees' State Insurance (ESI) scheme, you can follow these steps:

Ø  Application for EPF Registration :

-          Go to the ESIC website and create an account.

-          Log in and select New Employer Registration

-          Fill out the Employer Registration Form (Form-1) and upload the required documents

-          Review the information and submit the form

-          Pay the initial contribution

You can expect to receive a 17-digit ESI registration number after your application is approved. You can then distribute ESI cards to your employees so they can access ESI benefits.

Ø  After Registration  Compliance :

After registering for ESIC, an establishment must comply with specific requirements and file the necessary ESI returns. These obligations are essential for smooth operations and ensuring adherence to regulatory standards. The mandatory compliances include:

-          The establishment must maintain an attendance register to record the attendance of all employees.

-          A detailed wage register for workers must be carefully maintained. This register is essential for transparent documentation of salary information and ensures compliance with ESIC regulations.

-          Monthly return and challan submission within the first 15 days of the succeeding month.

-          A register documenting accidents on the premises is mandatory. Accurate recording of accidents is essential for compliance.

Penalties for Non-Compliance

·         Financial Penalties: Fines ranging from₹5,000 to ₹25,000for delayed registration or contribution.

·         Prosecution: Legal action, including imprisonment, for wilful default or fraud.

·         Interest on Arrears: Interest at 12% per annum on unpaid contributions.

·         Business Disruption: Authorities may impose restrictions on operations until compliance is achieved.

FAQs

1.      Who needs to register for ESIC ?

·         Any establishment with 10 or more employees earning a monthly wage of up to Rs. 21,000 (Rs. 25,000 for persons with disabilities) is required to register for ESIC. This applies to factories, shops, and establishments with employees under these wage limits.

2.     What is the wage limit for ESIC applicability ?

·         ESIC is applicable to employees earning a monthly wage of up to Rs. 21,000 (Rs. 25,000 for employees with disabilities). If the wage exceeds this threshold, the employee is not eligible for ESIC benefits.

3.     What is the contribution rate for ESIC ?

·         The ESIC contribution rate is:

-                       Employee: 0.75% of the monthly wage.

-                       Employer: 3.25% of the monthly wage.

The total contribution is 4% of the employee’s monthly wage, but the contribution is capped based on wage limits.

4.     What is the time frame for making ESIC contributions ?

·         ESIC contributions must be made on or before the 15th of the following month for which the contributions are due.

5.     How can an employer make ESIC payments ?

·         ESIC payments can be made online through the ESIC portal. Employers can log in to the portal, calculate the contribution for their employees, and pay the contribution through the online payment system.

6.     What are the penalties for non-compliance with ESIC ?

·         Failure to register with ESIC, non-payment of contributions, or not maintaining the required records can result in penalties, including fines and legal action against the employer. Penalties may include a fine of up to Rs. 500 for the first default and higher penalties for subsequent defaults.

7.      What happens if an employee leaves the company ?

·         If an employee leaves the company, the employer must update the employee's status with the ESIC portal. The employee can continue to avail of ESIC benefits until the end of the month in which they leave. If they start working at another registered establishment, they can transfer their ESIC account.

8.     Can ESIC be cancelled or deactivated ?

·         Yes, an establishment can cancel its ESIC registration if it no longer meets the eligibility criteria, such as having fewer than 10 employees or ceasing operations. The employer must follow the official procedure to deactivate or cancel the registration.

Why Choose Filings Corner for ESIC Registration?

·         Expert Team: Our CAs, CSs, MBAs, and Lawyers provide personalized advice and seamless service.

·         End-to-End Assistance: From documentation to registration and compliance, we manage it all.

·         Timely Compliance: Avoid penalties with our prompt and efficient services.

·         Transparent Pricing: No hidden costs, just clear and affordable pricing.

·         Dedicated Support: Comprehensive support for post-registration requirements.

Get Started with ESIC Registration Today

Ensure your employees' well-being and secure compliance for your business with ESIC registration. Contact Filings Corner for a hassle-free registration process and reliable support.

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