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What is ESI Registration?
Employees’ State Insurance (ESI) is managed and regulated by the Employees’ State Insurance Corporation, an autonomous body beneath the Ministry of Labor and Employment, Government of India. ESI scheme was introduced for Indian employees, which provides monetary, medical, and other employer benefits
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Eligibility to Obtain ESI Registration in India
There must be more than 10 employees to be eligible for ESI registration. ESI registration is possible for establishments having more than 20 employees in some areas. Here are some other measures that need to be fulfilled to get ESI registration:
- An employee whose gross earning is up to Rs. 21,000 per month can be availed with the help of an employer.
- The establishment is registered with EPFO.
- The total subsidy to ESI is 6.5% of the gross salary and can be further divided into:
- 75% by employer
- 75% of the employee
- For industrial units prone to injury or health issues, all employees earning less than Rs 21,000 are mandatorily required to obtain ESI registration.
Definition of Factory under ESI Act
A factory is any premises where ten or more persons are employed for wages on any day of the previous twelve months and in any part of which a manufacturing process is being held on with or without the aid of electricity. Suppose within the same premises of a factory, several departments are located, and the departments are engaged in work in connection with or related to the factory’s manufacturing process. In that case, they shall be separated from the factory.
This definition of a factory beneath the ESI includes a seasonal factory that operates for not more than seven months per year and is engaged in any process related to the blending or repacking of tea or coffee or any other manufacturing process notified by the central government during that time.
Mines are not included in this description under the Mines Act, 2952 or defined as a railway running shed. Therefore, if the number of persons working in the factory premises is ten or more, the assumption is that the factory has been paid wages or not. Also, not all people working in a factory need to be employed in the manufacturing process.
To obtain ESI registration in India, here is the list of documents that have to be proposed by the employer along with the application:
- Registration Certificate of Shop and Establishment Act.
- Factories Act
- Address Proof of the Principal Location of the Business
- Copy of Pan Card
- Bank Statement (Latest)
- Memorandum and Articles of Company or Partnership Deed or Trust Deed depending on the Nature of the Institution.
- Certificate of Commencement Registration Number
A monthly salary sheet is also required to calculate the contribution amount for each employee for ESI filing.
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Definition of Establishment under ESI Act
An establishment is defined as an organized group of men or women or an institution under the ESI Act; it does not have to be restricted to a specific location or premises. However, if a company employs 20 or more people, it would register with the ESI in India. As a result, businesses with less than 20 employees earning less than Rs 21,000 per month should not register for ESI.
The stores should be registered with the ESI Act as well. A store, according to the Supreme Court, is any location where economic operations leading to a sale or purchase are carried out. As a result, a shop’s customer service is the most important criterion to consider. Advertising agencies, liaison offices, consultancy services, and real estate services would all be required to register with the ESI in India.
This educational institution excludes hospitals, dispensaries, auditors’ and lawyers’ offices, chartered accountants, and private commercial hospitals.
Benefits of ESI registration in India
What are the benefits of registering for ESI in India?
Employees who are registered with the Employees’ State Insurance Corporation can take advantage of a variety of advantages.
- Medical Assistance: Registered ESI members and family members have access to comprehensive medical care and insurance from the first day of employment. Medical treatment is also available to retired members and permanently handicapped insured individuals and their spouses for a fee of Rs 120 per year.
- Maternity Benefit: Pregnant women can get maternity benefits for up to twenty-six weeks. This maternity leave can be extended up to 30 days on medical advice at the aggregate rate of pay, contributed has been made for 70 days in the previous year.
- Disability Benefit: 90% of wages are payable from the employee’s day, without any contribution, as long as the temporary disability continues. Permanent Disability Benefit is payable at 90% of the salary as a monthly payment.
- Sickness Benefits: Absence from work due to illness is allowed with 70% of monthly salary for a maximum of 91 days per year.
- Dependent Benefit: In case of accidental death of an employee while in employment, the deceased employee’s dependents will receive 90% of their monthly salary.
- Funeral Expenses: The family members of the deceased employees are entitled to an additional amount of Rs.10,000/- for funeral expenses.
- Confinement Expenses: Imprisonment expense can be availed in the imprisonment of an insured woman or wife of an employee without medical facilities under the ESI scheme.
Some Need-Based Benefits:
- Vocational Rehabilitation: Permanently Disabled Insured Employees are entitled to Vocational Rehabilitation Training in VRS.
- Physical Rehabilitation: Employees can avail of this in case of physical disability, injury, or threats due to employment.
- Old Age Medical Care: Medical care benefits can be availed for ESI employees or those opting for VRS/ERS by an annual payment of Rs.120. Members retiring due to permanent disability can also help themselves.
- Extended Sickness Benefit: Insured employees suffering from chronic diseases can avail of Extended Sickness Benefit up to 2 years should the sick leave of 91 days expires.
- Enhanced Illness Benefit: Enhanced illness benefit was an incentive measure for ESI employees to undergo vasectomy or tubectomy for the family’s welfare. This benefit can be extended in case of complications after the operation.