ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation which is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India.

ESI Registration provides monetary and medical benefits to Employees in a case of sickness, maternity, and employment injury and to make provisions for related matters.

Who needs to register Under ESIC

As per the government notification dated Sec 1(5) of the ESI Act the following entities are covered:

• Shops.
• Restaurants or hotels engaged only in sales.
• Cinemas.
• Road motor transport establishments.
• Newspaper establishments (which is not covered under the Factory Act).
• Private educational institutions.

What are the Benefits Employee Entitled to Receive

• Sickness benefits are provided to the employee at the rate of 70% of his salary in case such sickness continued for exceeding 91 days in a year, and the same is also certified.
• Medical benefits to an employee and his family members.
• Maternity benefit to the women who are pregnant (paid leaves).
• If the death of the employee happens while on work – 90% of the salary is given to his dependents in the form of a monthly payment after the death of the employee.
• Same as above in case of disability of the employee.
• Funeral expenses are provided in case of death of any employee covered under ESIC. An amount of Rs.10, 000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment.
• Retirement Benefit: Old age medical care expenses.
• Unemployment Benefits: An insured person having insurance for more than three years is provided unemployment benefits which become unemployed. Under the Rajiv Gandhi Shramik Kalyan Yojana, unemployment allowance is payable to an insured Person who become unemployed after being insured three or more years, due to closure of factory/establishment, retrenchment or permanent invalidity. The applicable unemployment allowances provided are:

1. Unemployment Allowance equal to 50% of wage for a maximum period of upto one year.

2. Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives unemployment allowance.

3. Vocational Training provided for upgrading skills – Expenditure on fee/travelling allowance borne by ESIC.

Registration Process

Step 1: Log In To ESIC Portal

• An employer requires getting himself registered on the ESIC portal.
• An employer can register by clicking on the ‘Sign Up’ button on the ESIC portal under the ‘Employer Login’-option on the home screen.
• The employers need to fill in the details after clicking on the ‘Sign up’ button, and submit the form.

Step 2: Confirmation Mail

• After submitting the form for sign up to the portal the employer will obtain a confirmation mail sent, to the registered mail ID & mobile number entered at the time of sign-up.
• For registering as an employer & employee under the ESIC scheme the email will contain the username & password details.

Step 3: Employer Registration Form-1

• Next, along with the username and password received in the mail, log in to the ESIC portal. This will pass on to the page having the option of ‘Tab – New Employer Registration’. Click It. 
• Next, from the drop-down list select the ‘Type of Unit’ and click on the ‘Submit’ button. The ‘Employer Registration – Form 1’ will come out & the employer requires filling in the details. 
• The Employer Registration Form-1 concedes details pertaining to the unit of the employer, details of the employer and employees. He needs to click on the ‘Submit’ button, once; the complete form is filled by the employer.  

Step 4: Payment For Registration

• The ‘Payment of Advance Contribution’ page will open after submission of the Employer Registration Form-1, where the employer requires filling the amount to be paid & select the payment mode. The employer will need to pay the advance contribution for 6 months.

Step 5: Registration Letter

• The system generated Registration Letter (C-11) is sent to the employer on the successful payment of six months advance contribution, which will contain a 17 digit Registration Number by the ESIC department.
• The Registration Letter (C-11) is a valid proof of registration of the employer.

Documents required for online ESI Registration

• The registration certificate or license issued by:
• Factories Act
• Address proof
• Copy of PAN card
• Copy of bank statement
• Photocopy of the last building tax/property tax receipt
• Memorandum and Articles of Association or Partnership Deed or Trust Deed – dependent on the applying entity
• Photocopy of registration
• Registration No. of CST/ST/GST

Due Dates For ESI

• Payment: 15th of every month
• Returns: May 11th and November 11th

Penalty in Failure to get ESI Registration & Returns

In case of any non-compliance by an employer, such as failure to get ESIC employer registration online or not fulfilling ESI return filing procedure, he shall be liable for a fine of INR 10,000/-.

Penal Provisions for Non-Payment or Delayed Payment of Contribution:

Period of Delay	Penalty in % p.a.
Less than 2 months	5%
2 to 4 months	10%
4 to 6 months	15%
6 months and above	25%

Penalty shall not exceeding the amount of contribution payable for default or delay in payment of the contribution.

ESI Monthly Contribution

The scheme of ESI is contributory in nature. Both employee’s and employer’s contribution is required at a specific rate. Though, rates are amended from time to time. Following is the monthly contribution rate that is contributed mandatorily by both employer and employee:-

• Employee has to contribute 0.75% of his basic wages to the ESI Fund.
• Employer has to contribute 3.25% of the basic wage paid to employees.

Employees who earn up to Rs. 137 of daily average wage are not entitled to be a part of contribution. However, it is the responsibility of the employer to contribute their own shares in respect of these employees.