ESIC Registration & Compliance

ESIC Registration & Compliance refers to the process of registering a company or establishment under the Employees' State Insurance Corporation (ESIC) Act in India. ESIC is a statutory body that provides social security and health insurance to workers and their families in case of sickness, maternity, disability, and death due to employment-related causes

1. ESIC Registration Process

The registration under ESIC is mandatory for establishments with 10 or more employees (in non-seasonal factories) and 20 or more employees (in seasonal factories), earning up to ₹21,000 per month. Here's the step-by-step process for registration:

a. Eligibility Criteria for ESIC Registration:

• Establishment Type: Any factory, shop, or establishment employing 10 or more employees in non-seasonal industries and 20 or more employees in seasonal industries.
• Salary Limits: Employees drawing a monthly salary up to ₹21,000 (₹25,000 for persons with disabilities) are eligible for ESIC benefits.

b. Documents Required for ESIC Registration:

• Employer’s PAN Card.
• Proof of Establishment (e.g., registration certificate, business license).
• Employee Details (name, designation, wage, etc.).
• List of employees covered under the ESIC scheme.
• Photograph of the employer.
• Bank Account Details for depositing the employee's contributions.

c. Online Registration:

The process of ESIC registration can be done online through the ESIC portal. Here's how:

• Visit the ESIC official website: https://www.esic.in.
• Register as an establishment (click on “Employer Login” and then “Sign Up”).
• Complete the online registration form with details of the business and employees.
• Upload the required documents.
• After submission, you will receive an ESI Code Number.

2. ESIC Compliance

Once registered, the company must ensure compliance with ESIC rules and regulations. Here are key compliance requirements:

a. Monthly Contributions:

Both employers and employees contribute towards ESIC:

• Employer Contribution: 3.25% of the employee's wages.
• Employee Contribution: 0.75% of the employee’s wages. Contributions should be made on or before the 15th of every month.

b. Filing of ESI Returns:

Employers are required to file monthly returns with the ESIC. This includes a list of employees and their wages, along with the contribution amounts. It can be filed online.

c. Display of ESIC Information:

Employers are required to display an ESIC notice in the workplace informing employees about their rights and ESIC benefits.

d. Timely Payment of Contributions:

Timely and accurate payment of contributions to the ESIC fund is mandatory. Late payment may attract fines and penalties.

e. Maintaining ESIC Records:

• Register of Employees: A register of all employees covered under the ESIC scheme must be maintained.
• Wage Records: A record of wages and the corresponding contributions must be kept.

f. Issuing ESIC Cards:

After registration, employees are issued ESIC cards (also known as ESI Smart Cards), which they can use to avail of medical benefits, disability benefits, and other insurance services provided by ESIC.

3. Benefits Under ESIC

Employees registered under ESIC are entitled to the following benefits:

• Medical Benefits: Coverage for hospitalization, medical treatment, and surgical procedures.
• Sickness Benefit: Cash benefits in case of illness or injury (providing 70% of average daily wages).
• Maternity Benefits: Paid leave and medical benefits for female employees during maternity.
• Disability Benefits: Compensation in case of temporary or permanent disability due to workplace accidents.
• Pension in Case of Death: For families in case of death of the employee due to work-related causes.
• Funeral Expenses: A lump sum amount for funeral costs in case of an employee’s death.

4. Penalties for Non-Compliance

Failure to register under ESIC or comply with its rules may result in penalties such as:

• Fine: Penalties up to ₹50,000 or more for non-registration or delayed contribution.
• Imprisonment: Employers can face imprisonment for defaulting on payments or evading contributions.

5. Key Takeaways

• Mandatory for Eligible Establishments: ESIC registration is mandatory for establishments with 10 or more employees (20 for seasonal).
• Timely Contribution: Employers must ensure timely payment of contributions to avoid penalties.
• ESIC Card: Employees must be provided with an ESIC card for availing benefits.
• Compliance with ESIC Rules: Ongoing compliance with ESIC rules and regulations is required.