Procedure for ESI registration for employees

Understanding the ESI Scheme

The Employees' State Insurance (ESI) Scheme is a comprehensive social security program administered by the Employees' State Insurance Corporation (ESIC) under the ESI Act, 1948. It provides medical, cash, and other benefits to employees and their families.

The ESI Act applies to factories and establishments employing 10 or more persons (20 in some states) with wages up to Rs. 21,000 per month (Rs. 25,000 for persons with disabilities). The scheme is contributory, with both employer and employee making contributions.

The employer contributes 3.25% of the employee's wages, and the employee contributes 0.75% of wages. The government also contributes to the scheme. Contributions are calculated on total monthly wages including basic pay, DA, HRA, and other allowances.

Benefits Under ESI Scheme

Medical benefits cover the employee and their family members, including outpatient care, inpatient treatment, specialist consultations, medicines, diagnostic tests, and maternity care. Medical benefits are available from day one of insurable employment.

Cash benefits include sickness benefit at 70% of average daily wages for up to 91 days in a year, maternity benefit for 26 weeks (extended to 6 months for certain cases), disablement benefit for temporary or permanent disability, and dependent benefit for dependents in case of death.

Other benefits include funeral expenses of Rs. 15,000, vocational rehabilitation training for disabled persons, physical rehabilitation, and free medical care for retired employees who have contributed for at least 5 years.

Procedure for ESI Registration

Employers must register their factory or establishment with ESIC by filing Form 01 online through the ESIC portal. After registration, the employer receives a 17-digit employer code number for their establishment.

Each employee must be registered under the ESI scheme. The employer provides the employee's details including name, date of birth, bank details, and Aadhaar number. Employees receive an ESI Insurance Number linked to their UAN and Aadhaar.

Registration must be done within 15 days of the Act becoming applicable to the establishment. For new employees, registration must be completed before the employee becomes eligible for ESI benefits.

Employer Compliance and Penalties

Employers must deduct ESI contributions from employees' wages and add their own contribution. Contributions must be deposited to ESIC within 15 days of the end of each calendar month through online payment. Monthly contribution returns must be filed.

The employer maintains a register of employees, contributions, and benefits. ESI contribution cards or digital records must be maintained. Employees must be informed about their ESI rights and benefits.

Non-compliance can result in penalties including interest at 12% per annum for delayed contributions, damages up to 25% of contributions for default, and prosecution with imprisonment up to 2 years and fine. Vidhi Legal Services assists employers with ESI compliance and registration.

Frequently Asked Questions