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About

EMPLOYEES STATE INSURANCE (ESI) is a social insurance and self-financing scheme that protects the interest of workers in eventuality such as sickness, maternity, temporary or permanent physical disablement, death due to employment injury resulting in loss of wages or earning capacity. It is governed by Employees' State Insurance Act, 1948. This act provides need based care to workers and their dependents. It is managed by Employees’ State Insurance Corporation (ESIC) under the Ministry of Labour and Employment.

Quick Enquiry

APPLICABILITY OF ESI:

Following establishments employing 10 or more persons attracts ESI coverage:

  1. Shop
  2. Hotels or restaurants not having any manufacturing activity, but only engaged in sales
  3. Cinemas including preview theatres
  4. Road Motor Transport Establishments
  5. Newspaper establishments (that is not covered as factory under Sec.2(12))
  6. 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 centers, pathological labs)

WAGE LIMIT:

The existing wage-limit for coverage under the Act, is Rs.15,000/- per month (w.ef. 01/05/2010) That is, all employees earning up to Rs. 15,000 per month are applicable for ESI Contribution. Employees earning Rs. 15,001 per month and above are exempted from ESI Contribution.

The wage ceiling for coverage of an employee with ‘disability’ is Rs. 25,000/- per month (w.e.f. 1/April/2008).

CONTRIBUTION FOR ESI:

The ESI Scheme is mainly financed by contributions raised from employees covered under the scheme and their employers, as a fixed percentage of wages. The rates of contribution are:

A

Employees’ Contribution

1.75% of Total Wages

B

Employers’  Contribution

4.75% of Total Wages

 

Any employee earning less than Rs. 15,000 per month needs to contribute 1.75% of his/her pay towards the ESI, while 4.75% will be contributed towards his/her ESI by the company.

  • NOTES
  1. 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.
  2. Where all employees are earning above Rs. 15,000/- per month, registration is still required but a letter will be filed that there are no employees who draw a gross salary lesser than Rs. 15,000 per month and therefore no contribution, filing of returns etc. is still required. Therefore ESI registration is purely from a compliance perspective.

TIME LIMIT FOR REGISTRATION:

The entire process takes about 30 days.

DOCUMENTS REQUIRED:

The following documents are required for registering under the ESI scheme:

1. A registration certificate or a license obtained under Shops and Establishment Act or Factories Act

2. Memorandum and Articles of Association, or partnership deed or trust deed, based on the type of entity

3. Certificate of registration for all entities and commencement of production for factories

4. A list of employees with their monthly compensation, in detail

5. A list of directors, partners and shareholders of the company

6. The PAN card of the business and address proof of the establishment/firm

7. Bank statements of the organization, with evidence of commencement of operation

ESI CERTIFICATE 

Q.1 How does the scheme help the employees?

Ans. The scheme provides full medical care to the employee registered under the scheme during the period of his incapacity for 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.

Q.2 What is registration of Factory/ Establishment?

Ans. Registration is the process, by which every factory/ establishment, to which the Act applies, is identified for the purpose of the ESI Scheme, and their individual records are set up for them.

Q.3 What is a Code number?

Ans. It is a 17 digit unique identification number allotted to each of the factory/establishment registered under the provisions of the Act.

Q.4 What is a Sub-code number?

Ans. This is also a unique identification number allotted to a sub-unit, branch office, sales office or Registered Office of a covered factory or establishment located in the same State or different State.

 

 

Q.5 What is the time limit for payment of contribution?

Ans. Contribution shall be paid in respect of an employee in to a bank duly authorized by the Corporation within 21 days of the last day of the calendar month in which the contribution falls due for any wage period.

Q.6 What are consequences of non / late payment of employees' contribution deducted but not paid?

Ans. Non-payment or delayed payment of the Employee's contribution deducted from the wages of the employee amounts to ' Breach of trust' and is punishable under Indian Penal Code.

Q.7 What are the returns/ reports to be submitted by the employer?

Ans. 1. Reports: Accident report in Form 12 in case any accident takes place, to the notice of the Accident.

2. Abstention verification report as and when sought by the branch Manager in respect of any IP.

3. Records including attendance, wages and books of accounts sought by Social Security Officer on visit to the factory/establishment for inspection with due intimation.

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