Employee State Insurance (ESI)
Businesses employing more than ten employees at any time during the year are required to get an Employee State Insurance Registration within 15 days of attaining the strength. Any delay in registration will attract heavy penalties. The definition of Employees includes both contractual and permanent employees.
Why Register for Employee State Insurance (ESI)?
Employees State Insurance Scheme is a social security benefit scheme implemented by the government in order to secure the socio-economic interests of the employees. In today’s world where every business is striving to get the best workforce, it’s important to have such employee benefit schemes to let them know that the business cares for the
How long will it take?
Upload Required Documents
Two – Three Days
Filing ESI Application
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Frequently asked Questions
Yes, it is the statutory responsibility of the employer, to register their Factory/ Establishment under the ESI Act within 15 days from the date of its applicability to them.
In an area notified u/s 1(3) by Central Govt. all factories where 10 or more persons are employed attract coverage under Section2(12) of ESI Act. Further, according to the notification issued by the appropriate Government (Central/State) under Section 1(5) of the Act, the following establishments employing 10 or more persons attract ESI coverage.
(ii) Hotels or restaurants not having any manufacturing activity, but only engaged in ‘sales’.
(iii) Cinemas including preview theatres;
(iv) Road Motor Transport Establishments;
(v) Newspaper establishments.(that is not covered as a factory under Sec.2(12));
(vi) Private Educational Institutions (those run by individuals, trustees, societies or other
organizations and Medical Institutions (including Corporate, Joint Sector, trust, charitable, and
private ownership hospitals, nursing homes, diagnostic centres, pathological labs).
In some states, coverage is still for 20 or more persons employed under sec 1(5). A few State
Governments have not extended the scheme to Medical & Educational Institutions.
The scheme provides full medical care to the employee registered under the ESI Act, 1948 during the period of his incapacity, restoration of his health and working capacity. It provides financial assistance to compensate the loss of his/ her wages during the period of his abstention from work due to
sickness, maternity and employment injury. The scheme provides medical care to his/her family members also.
It is a 17 digit unique identification number allotted to each of the factory/establishment registered under the provisions of the Act
E.S.I. The scheme being contributory in nature, all the employees in the factories or establishments to which the Act applies shall be insured in a manner provided by the Act. The contribution payable to the Corporation in respect of an employee shall comprise of employer’s contribution and employee’s contribution at a specified rate. The rates are revised from time to time. Currently, the employee’s contribution rate (w.e.f. 1.1.97) is 1.75% of the wages and that of employers is 4.75% of the wages paid/payable in respect of the employees in every wage period. For newly implemented areas, the contribution rate is 1% of wages of Employee and 3% payable by Employers for first 24 months(w.e.f. 06.10.2016) Employees in receipt of a daily average wage up to Rs.137/- are exempted from payment of contribution. Employers will, however, contribute their own share in respect of these employees.
A typical ESI registration would take around 5-15 days depending on the requirements & circumstances of the case.
Once a factory or an Establishment is covered under the Act, it continues to be covered notwithstanding the fact that the number of persons/ coverable employees employed therein at any time falls below the required limit or there is a change in the manufacturing activity.
If the wages of an employee (excluding remuneration for overtime work) exceeds the wage limit prescribed by the Central Government after the start of contribution period, he continues to be an employee till the end of that contribution period and the contribution is to be deducted and paid on the
total wages earned by him.