Private Limited Company Registration in 7 days
Through OneClick - India’s leading legal technology firm trusted by over thousand entrepreneurs.
-
Fast-track your registration process.
-
Help you stay in compliance with Indian law.
-
Keep you informed of any law changes.
-
A dedicated business specialist.
Starting from ₹ 8,000/-
ESI registration
The Employees’ State Insurance (ESI) scheme is a self-financing social security and health insurance scheme for Indian workers. Administered by the Employees’ State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labour and Employment, the ESI scheme provides medical and financial benefits to employees in case of sickness, maternity, disability, or death due to employment injury. For employers in India, ESI registration is mandatory once they meet certain criteria, ensuring that their employees are covered under this important social security scheme.
Requirements for ESI Registration
To determine whether a business is required to register under the ESI scheme, certain conditions must be met:
- Employee Strength: Any establishment employing 10 or more employees (in some states, the threshold is 20 employees) who earn a gross salary of ₹21,000 or less per month is required to register under the ESI Act. This includes both full-time and part-time workers, such as employees, workers on contract, and trainees.
- Coverage Area: The ESI scheme is applicable to all factories and other specified establishments located in areas notified by the government. The coverage extends to various sectors including manufacturing units, shops, cinemas, hotels, restaurants, transport undertakings, and more.
- Wage Limit: As mentioned, the scheme is applicable to employees earning a monthly gross salary of up to ₹21,000. For employees with disabilities, the wage limit is ₹25,000.
Contribution Requirements: Both the employer and the employee contribute to the ESI scheme. The employer contributes 4% of the employee’s gross monthly salary, while the employee contributes 0.75%. However, employees earning ₹176 or less per day are exempted from their contribution.
Why Choose to Make ESI Registration?
ESI registration provides several advantages to both employers and employees. Here’s why you should consider registering for ESI:
- Social Security for Employees: ESI offers a comprehensive package of social security benefits to employees. These include medical care for the insured employee and their family, cash benefits during sickness and maternity leave, and pensions in case of disability or death due to employment injury. This not only safeguards the well-being of employees but also boosts their morale and productivity.
- Legal Compliance: ESI registration is a statutory requirement for businesses meeting the eligibility criteria. Non-compliance can result in penalties, fines, and legal proceedings. By registering, you ensure that your business adheres to the legal obligations set forth by the ESI Act.
- Reduced Employer Liability: In the unfortunate event of an employee’s injury or illness due to workplace conditions, the employer’s liability is significantly reduced due to the insurance coverage provided by the ESI scheme. This protects the employer from potentially high compensation costs.
- Government Incentives: Employers who are compliant with ESI and other statutory labor laws may be eligible for various government incentives and schemes. This can be a significant advantage for businesses, particularly in sectors where labor welfare is a priority.
Enhanced Reputation: Employers who provide ESI coverage are often viewed more favorably by potential employees and business partners. It demonstrates a commitment to the welfare of workers, which can enhance the company’s reputation and attract better talent.
Documents Required for ESI Registration
The process of registering for ESI is straightforward, provided you have the necessary documents ready. Here’s what you’ll need:
- Employer’s Registration Certificate: Depending on your business type, this could be the incorporation certificate, partnership deed, or any other registration document.
- Employee Details: List of employees along with their personal details, salary structure, date of joining, etc.
- Bank Account Details: A copy of the business’s bank statement or a canceled cheque for verifying account details.
- PAN Card: A copy of the PAN card of the business entity or the proprietor.
- Address Proof: Proof of the registered business address, which could include utility bills, lease agreements, or other relevant documents.
- List of Directors/Partners/Proprietors: This should include their details and identity proofs.
- Attendance Register: A copy of the attendance register showing the strength of employees.
- Factory/Shop License: If applicable, a copy of the factory or shop license issued by the respective authorities.
Conclusion
ESI registration is more than just a statutory obligation; it is a crucial aspect of employee welfare in India. By ensuring that your business is ESI-compliant, you not only fulfill your legal duties but also contribute to the overall health and well-being of your workforce. With the right documentation and timely registration, you can smoothly integrate ESI benefits into your business operations, fostering a healthier and more secure work environment for your employees.
Have questions about Private Limited Company?
ESI registration is mandatory for establishments employing 10 or more employees (or 20 in some states) who earn a gross monthly salary of ₹21,000 or less.
You can apply for ESI registration online through the official ESIC portal. The process involves filling out the necessary forms and submitting the required documents.
No, ESI is required only for employees earning up to ₹21,000 per month. Employees earning above this threshold are not eligible for ESI benefits.
Employees covered under ESI are entitled to a range of benefits, including medical care, sickness benefits, maternity benefits, disability benefits, and dependents’ benefits in case of death due to employment injury.
Once you submit the application with all required documents, ESI registration typically takes 5-7 working days.
Yes, failure to register under ESI when required can lead to penalties, fines, and legal action. The ESIC may impose penalties for non-compliance, and employers may also face prosecution.
Yes, businesses with fewer than 10 employees can voluntarily register under ESI to provide benefits to their workers, although it is not mandatory.
Once registered, if an employee’s salary exceeds ₹21,000, they will continue to be covered under ESI until the end of that contribution period. After that, they will no longer be required to contribute.
You can update your ESI registration details online through the ESIC portal by logging into your account and making the necessary changes.