Obox Hr: ESIC Registration of Employer

Medical Health Tool for Your Employees & Their Families

Employees’ State Insurance Corporation Act, 1948 was introduced by the government to provide social security and medical facilities to employees and their families. ESI is like a social insurance scheme that would protect the interest of workers in situations such as sickness, maternity, temporary or permanent physical disablement, death due to injury at work.

The fund contributed towards ESIC is managed by the Employees’ State Insurance Corporation. Also, a new employee has to be registered online through the ESI portal on the date of appointment and a maximum of 10 days of the Date of Joining

Applicability

The Act applies to the employees drawing a gross monthly salary of up to INR. 21000/- per month.

Non- seasonal factories using power and employing 10 or more people.
Non-seasonal and non-power factories and establishments employing 20 or more people.
The eligibility of registration under employee count varies from one state to another.
As per Rules, within 15 days of ESI Scheme applicability on the employer, it is the legal obligation of the employer to get registered with ESIC and get Insurance number for all coverable employees.. Delay in Registration attracts Penalty

ESIC Benefits

The benefits of registering under this scheme are varied. The workers are provided with a huge variety of medical, monetary and other benefits from the employer. Some of them are:

Sickness & Medical Benefits (Medical facilities to the employees and their families)
Maternity Benefits
Dependants Benefits
Disablement Benefits
Other Benefits (Funeral Expenses, Compensation, Physical Rehabilitation, Vocational Rehabilitation, Old- Age Medical Care, etc.)

FAQs

What if ESI registration is not done?

As per the Rule within 15 days of ESI Scheme applicability on employer, it is the legal obligation of the employer to get register with ESIC and Get Insurance number of all employees drawing monthly salary upto RS 21,000. PENALTY APPLY FOR DELAY REGISTRATION.

If the wages of an employee exceed Rs. 21,000 in a month, can he be treated as not covered and deduction of contribution from his wages is stopped?

If the wages of an employee (excluding remuneration for overtime work) exceeds the wage limit prescribed by the Central Government after 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.

Is it mandatory for the employer to register under ESIC?

Yes, it is mandatory requirement for every employer who comes under this act to register their Factory/ Establishment.

can any establishment or factory once covered go out of coverage if the number of persons employed falls below the minimum limit prescribed

Once a factory or an Establishment is covered under the Act, it continues to be covered despite the fact that the number of covered employees employed at any time falls below the required limit or there is a change in the manufacturing activity.

What is the wage limit?

The employees drawing total wages of up to Rs. 21,000/- only is eligible for the ESIC coverage, however, for the purpose of counting the number of employees for the establishment, all employees are covered.

What is the contribution rate currently?

The employer has to contribute 3.25% of the total wages paid to employees, while employee contribution shall be 0.75% of his total wages. The responsibility to deduct the employee contribution is on the employer

What are the records to be maintained for the purpose of the ESI scheme?

In addition to the Muster roll, wage record and books of Account maintained under other laws, the employer is required to maintain the following records for ESI:-

Accident Register in Form-11
An inspection book.
The immediate employer is also required to maintain the Employee’s Register for the employees deployed to the principal employer.

Is there any interest on delayed payment?

An employer who doesn’t pay the contribution within the time limit, will be liable to pay simple interest at the rate of 12% per annum for each day of default or delay in payment of contribution.