Employee State Insurance Scheme at a Glance

The Employee State Insurance (ESI) Scheme is a comprehensive social security program introduced by the Government of India to provide financial protection and medical benefits to employees in case of sickness, injury, maternity, or disability arising from their employment. Governed by the Employees’ State Insurance Act, 1948, the scheme ensures that workers in the organized sector have access to essential healthcare services and income support during times of medical need. It covers employees earning below a specified wage threshold and extends a wide range of benefits, including medical care, cash compensation, and rehabilitation support. The ESI Scheme is a key initiative aimed at improving the welfare of workers and enhancing the overall social security framework in India.

Legal Requirements of Employers Toward Employee State Insurance (ESI)

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Under the Employees’ State Insurance (ESI) Act, 1948, employers have specific legal obligations toward their employees to ensure compliance with the Employee State Insurance Scheme. These requirements are crucial to safeguarding employees’ social security and welfare. The key legal obligations of employers include:

1. Registration: Employers are required to register their establishments with the Employee State Insurance Corporation (ESIC) within 15 days of becoming eligible under the ESI Act. This applies to organizations employing 10 or more workers (in some states, the threshold may vary).
2. Contribution Payment: Employers must contribute to the ESI fund regularly. The contribution rate is currently 3.25% of the employee’s wages, while the employee contributes 0.75%. Employers are responsible for deducting the employee’s contribution from their salary and remitting both contributions to ESIC within the stipulated time.
3. Maintenance of Records: Employers are legally obligated to maintain detailed records of employee wages, attendance, and contributions. These records must be produced for inspection by ESIC officers when required.
4. Filing of Returns: Employers must submit periodic returns, including details of employees, wages paid, and contributions made to the ESIC. These returns are generally submitted biannually.
5. Display of Notices: Employers must display ESI notices and instructions at the workplace in a visible area, informing employees about their rights and the benefits of the ESI Scheme.
6. Facilitation of Benefits: Employers must ensure that employees are enrolled in the scheme and are able to access the benefits such as medical care, sickness benefits, maternity benefits, and others as per the ESI provisions. This includes issuing necessary documents like the temporary identification certificate.
7. Employee Communication: Employers are responsible for educating and informing employees about the scheme, their entitlements, and how to avail of medical and other benefits under the ESI Scheme.

Documents Required for Employee State Insurance (ESI) Registration

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To register with the Employee State Insurance Corporation (ESIC), employers need to submit a set of documents to comply with the registration process. The required documents typically include:

1. Proof of Establishment:
   • Certificate of Incorporation (for companies)
   • Partnership Deed (for partnerships)
   • Trade License or Shops and Establishments Certificate
2. Proof of Address:
   • Utility bills (electricity, water, gas) or a lease agreement
   • Office rent agreement or property documents
3. Proof of Identity:
   • PAN Card of the business entity
   • Aadhar Card of the principal employer
   • Identity proof of the authorized signatory (e.g., Passport, Voter ID, or Aadhar Card)
4. Details of Employees:
   • List of employees with their names, addresses, and dates of joining
   • Employee wage details and their classification
5. Bank Account Details:
   • A copy of the bank statement or passbook of the business entity
   • Bank account details where ESI contributions will be deposited
6. Other Relevant Documents:
   • Employers’ Provident Fund (EPF) registration, if applicable
   • Proof of payment of wages (e.g., salary slips)

Registration Process for Employee State Insurance (ESI)

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The registration process for the Employee State Insurance (ESI) Scheme involves several steps to ensure that both the employer and employees are correctly enrolled and covered under the scheme. Here’s an overview of the process:

1. Determine Eligibility:
   • Confirm that your establishment is covered under the ESI Act, which typically applies to businesses with 10 or more employees (in some states, the threshold may vary).
2. Gather Required Documents:
   • Collect all necessary documents, such as proof of establishment, proof of address, proof of identity, details of employees, bank account details, and other relevant documents.
3. Online Registration:
   • Visit the official ESIC website (www.esic.in) and navigate to the employer registration section.
   • Complete the online registration form by providing details of the establishment, principal employer, and employees.
   • Upload the required documents as specified in the online form.
4. Submit Application:
   • After filling out the online form and uploading the documents, submit the application. You will receive an acknowledgment with a reference number.
5. Inspection (if required):
   • An ESIC officer may visit the establishment to verify the details provided and ensure compliance. This step is generally required for new registrations or changes in the establishment.
6. Obtain Registration Number:
   • Upon successful processing of the application and verification, ESIC will issue a unique registration number. This number is essential for all future transactions related to ESI contributions and claims.
7. Display of ESI Notices:
   • After registration, ensure that ESI notices and instructions are prominently displayed at the workplace to inform employees about the scheme and their rights.
8. Compliance:
   • Start deducting ESI contributions from employees’ wages and remit both employee and employer contributions to the ESIC within the stipulated deadlines.
   • Maintain records and submit periodic returns as required by the ESIC.

Benefits of Employee State Insurance (ESI):

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When and How to Register All Eligible Employees with ESIC

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EMPLOYEE INSURANCE NUMBER

Once you receive the Registration Intimation Letter with the 17-digit Registration Code from ESIC, follow these steps:

1. Collect Employee Details:
   • Gather comprehensive details of all eligible employees and their family members, including photographs, Aadhar Card (if available), or other address and ID proof.
   • Obtain valid documents proving the relationship between employees and their family members.
2. Register Employees:
   • Register each employee individually through the ESIC portal using the online system.
   • The generated Insurance Number is permanent and will be used throughout the employee’s lifetime, regardless of changes in employment or establishment.
3. Submit Details Online:
   • Log in to the ESIC portal as an employer and submit the employee details online.
4. Update Information:
   • Update the employee details on the ESIC portal for any changes in residence, dispensary, or employment status.

TEMPORARY IDENTITY CARD (TIC)

• After registering an employee online, print the Temporary Identity Certificate (TIC), which is valid for one month.

PERMANENT IDENTITY CARD (PIC)

• TIC will be converted into a Permanent Identity Card (PIC) upon linking the Aadhar number with the Insurance Number.
• With the PIC, employees and their families can access benefits under the ESI Scheme without issues.
• If the Aadhar number is not available, affix the employee’s photo along with family members on the TIC, authenticated with your stamp and signature.
• Ensure that the employee and their family members link their Aadhar numbers on the ESIC website (www.esic.in) within one month to avail of medical benefits and cash benefits smoothly.