ESI Registration & Returns Filing Procedure

Introduction:

Employee State Insurance (ESI) is a cornerstone social security scheme in India, established to provide medical and disablement benefits to workers. Enacted through the ESI Act, 1948, this scheme is administered by the Employees’ State Insurance Corporation (ESIC) under the Ministry of Labour and Employment. In this extensive guide, we delve into the nuances of ESI registration and returns filing procedures, ensuring comprehensive understanding and compliance.

When ESI Registration is Required:

ESI registration is mandated when a company or entity hires 10 or more low-earning employees. Employees earning below Rs. 15,000 per month are eligible for ESI benefits, with contributions from both the employee and employer.

Online ESI Registration:

To initiate ESI registrations, establishments with over 10 employees earning less than Rs. 15,000 per month must apply within 15 days of the ESI Act becoming applicable. ESI registration can conveniently be completed online through platforms such as Etaxdial, serving major cities across India.

ESI Registration Procedure: Documents Required:

Essential documents required for ESI registration include:

• Registration certificate or license obtained under Shops and Establishment Act or Factories Act
• Certificate of registration (Memorandum and Articles of Association for private limited companies, partnership deed for LLPs, etc.)
• List of employees with monthly compensation details
• List of directors, partners, and shareholders
• PAN card and address proof of the establishment/firm
• Bank statements and evidence of commencement of operations

ESI Registration Procedure: Steps Involved:

Fill and submit Employer’s Registration Form (Form-1) available in PDF format on the ESIC website. Upon verification, a 17-digit unique identity number will be provided. Employees receive ESI cards after submission of required forms with family details. Keep ESIC informed about any changes such as employee additions.

Documents for ESI Returns:

Regular maintenance of documents is crucial for ESI returns filing, including:

• Attendance register
• Form 6 register
• Register of wages
• Accident register
• Inspection book
• Monthly challans and returns

Filing of ESI Returns:

ESI returns are filed half-yearly through the ESIC online portal. Before filing returns, ensure all employee details are updated. Collect user ID and password from the ESIC office. Log in to the ESIC portal and update employee details if necessary. File monthly returns and generate a challan for payment. Safeguard the generated challan for inspection purposes. Utilize the portal for various actions such as updating employee details, adding new employees, etc.

Frequently Asked Questions:

• • What is the procedure for employer registration under ESI?

  • An employer must apply using FORM 01 within 15 days of the act becoming applicable.

  • Is ESI registration mandatory for employers?

  • Yes, every employer under the act must register their unit/Factory/Establishment.

  • What are compliance requirements?

  • Compliance includes depositing monthly contributions, filing half-yearly returns, and reporting any changes in business activity.

  • Are benefits transferable to insured employees?

  • No, benefits under the act are not transferable.

  • Is employer registration mandatory under the scheme?

  • Yes, it is the legal responsibility of employers to register their unit/Factory/Establishment within 15 days of the act becoming applicable.

  • What is the ESI Code number?

  • This 17-digit unique identification number is allotted to every registered establishment.

  • Can an establishment go out of coverage if the number of employees falls below the minimum limit?

  • Once covered, establishments remain covered irrespective of employee count changes.

  • If wages exceed Rs.15,000 in a month, is the employee still covered?

  • Yes, contributions continue until the end of the contribution period.

  • Is overtime included in the wage ceiling limit for coverage?

  • No, overtime is excluded from the wage ceiling limit but included for contribution and benefit calculations.

  • What is the time limit for contribution payment?

  • Contributions must be paid within 21 days of the last day of the month in which they are due.

  • What is the mode of payment for contributions?

  • Contributions can be paid online through the ESIC portal or at any branch of the SBI.

  • Is there interest on delayed payments?

  • Yes, employers failing to pay contributions on time incur a simple interest of 12% per annum.

  • What records must be maintained for the ESI scheme?

  • In addition to other records, employers must maintain an accident register and inspection book.

  • What is employee registration?

  • Employee registration records information about entry into insured employment under the Act.

  • Why is employee registration necessary?

  • It is necessary to identify employees and provide them with benefits funded by employer contributions.

  • What is an identity card?

  • An identity card is provided after registration, serving as proof for claiming medical and cash benefits.

  • What is the scale of medical benefit?

  • It includes complete medical treatment.

  • Do disablement or dependent benefits have work requirements?

  • No, there are no qualifying conditions for claiming these benefits.

  • What benefits are admissible to dependents?

  • Dependents are entitled to medical care, artificial limbs, and other benefits.

  • Who is counted for establishment coverage?

  • All individuals employed by the establishment are counted.

  • Who is a principal employer?

  • The principal employer is responsible for the supervision and control of the establishment.

  • Who is an immediate employer?

  • An immediate employer includes contractors and individuals executing work for the principal employer.

  • Who are counted as employees?

  • Employees include those directly employed and those employed by immediate employers.

  • What are the periods of contribution and benefit?

  • The financial year is divided into two six-monthly contribution periods.

  • What is Sickness Benefit?

  • It is paid for the period of absence due to medical reasons, confirmed by an Authorized Medical Officer.

  • What is Disablement?

  • It is a condition resulting from employment injury, affecting the ability to work.

  • What is an Employment-related Injury?

  • It is a personal injury caused by an accident or occupational disease in the course of employment.

  • When do Dependents receive Benefits?

  • Dependents receive benefits following an employee’s death due to employment-related injury.

  • What are Maternity Benefits?

  • These are payments made to insured female employees during periods of absence due to pregnancy-related reasons.

  • What are Funeral Expenses?

  • A lump sum amount is provided towards funeral expenses of a deceased employee.

  • What is the Standard Benefit Rate?

  • It is the mean average daily wage calculated based on total wages paid during the contribution period.

  • What are the advantages of ESI Registration?

  • Benefits include comprehensive medical care, coverage for dependents, reimbursement of payments, and access to medical facilities.

Conclusion:

ESI registration and returns filing are indispensable for businesses to adhere to legal obligations and provide employees with social security benefits. Compliance with the ESI Act ensures access to proper medical care and financial security for employees. For further guidance and assistance, businesses can consult legal experts or utilize online resources to navigate the registration and returns filing processes effectively.

Author: Noor Siddiqui, Founder of E-Taxdial.com