ESIC 

What is ESIC?

The Employees’ State Insurance Corporation (ESIC) is a statutory body in India that provides social security and health insurance to workers in the organized sector. Established under the Employees’ State Insurance Act of 1948, ESIC aims to provide financial assistance and medical care to employees and their dependents in case of sickness, maternity, disability, or death due to employment-related injuries. The scheme is funded through contributions from both employers and employees.

 

 

How to Register in ESIC Online?

To register for ESIC online, follow these steps:

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• Visit the Official Website: Go to the official ESIC website at esic.nic.in

 

• Navigate to Registration Section: Look for the ‘Employer’ section on the homepage and select ‘ESI Registration’.

 

• Fill Out the Application Form: You will need to fill out an online application form with details such as:

      -Employer’s name

      -Address

      -Type of establishment

      - Number of employees

      -PAN (Permanent Account Number)

      -Bank account details

 

• Upload Required Documents: Attach necessary documents like:

     -Certificate of incorporation or registration

      -PAN card

      -Address proof

      -Employee details

 

• Submit the Application: After filling out all required fields and uploading documents, submit your application.

 

• Receive Registration Number: Upon successful submission, you will receive a unique ESIC registration number via email or SMS.

 

• Print Registration Certificate: You can download and print your registration certificate from the portal once your application is processed.

 

 

Who is Eligible for ESIC Registration?

Eligibility for ESIC registration primarily includes:

• Employees: All employees working in factories or establishments with 10 or more employees are eligible for coverage under ESIC.

• Wage Limit: As of now, employees earning up to ₹21,000 per month (₹25,000 for persons with disabilities) are eligible for ESIC benefits.

• Employers: Any employer who hires eligible employees must register under ESIC within 15 days of hiring their first employee.

Certain categories of workers may be excluded from this scheme based on specific criteria set by the government.

 

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How much is the Cost of ESIC Registration?

The cost associated with ESIC registration primarily involves contributions made by employers and employees rather than a direct registration fee. The contribution rates are as follows:

• Employer Contribution: 3.25% of the employee’s wages.

• Employee Contribution: 0.75% of their wages.

These contributions are mandatory and are deducted monthly from salaries along with employer contributions. There is no one-time fee for registering; however, employers must ensure timely payment of these contributions to maintain compliance with the law.

In summary, while there is no direct cost for registering with ESIC, ongoing contributions based on employee wages represent a significant financial commitment that employers must manage regularly.

 

 

What is the ESI eligibility salary limit?

The Employee State Insurance (ESI) scheme in India is designed to provide social security and health insurance to employees. As of the latest updates in 2025, the eligibility salary limit for ESI coverage is set at ₹21,000 per month for employees working in non-seasonal factories and establishments. For persons with disabilities, this limit is increased to ₹25,000 per month. This means that any employee earning below these thresholds is eligible for ESI benefits.

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Eligible Employees for ESI
Employees who are eligible for ESI include those working in factories or establishments with 10 or more employees (20 or more in some states). The following categories of workers are typically covered under the ESI scheme:

• Employees earning a gross salary of up to ₹21,000 per month (or ₹25,000 for persons with disabilities).

• Workers engaged in manufacturing processes, shops, hotels, restaurants, cinemas, and other establishments as defined by the ESI Act.

• Employees who are not covered by other social security schemes.

It’s important to note that certain categories of workers such as casual workers or those employed on a temporary basis may also be included depending on their earnings and employment conditions.

 

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Applicability of the ESI Scheme

The Employees’ State Insurance (ESI) scheme is designed to provide social security and health insurance benefits to employees in India. Understanding its applicability is crucial for both employers and employees. Here’s a detailed breakdown:

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1. Coverage Criteria

The ESI scheme applies to all factories and establishments as defined under the ESI Act, which must have a minimum number of employees. Specifically, it is applicable to:

• Factories with 10 or more employees.

• Other establishments with 20 or more employees in certain states.

2. Wage Limitations:

To be covered under the ESI scheme, an employee’s monthly wages must not exceed Rs. 21,000. However, for individuals with disabilities, this limit is raised to Rs. 25,000.

3. Types of Establishments Covered:

The ESI scheme extends beyond traditional factories and includes various types of establishments such as:

• Shops

• Restaurants

• Hotels

• Cinema theatres

• Road motor transport undertakings

• Newspaper establishments

• Educational institutions

• Medical institutions

4. Specific Government Establishments:

The scheme also covers specific Central Government establishments that employ 20 or more persons engaged in sectors like:

• Insurance business

• Non-Banking Financial Companies (NBFCs)

• Airport authorities

• Port trusts

• Warehousing establishments

5. Exemptions:

Certain categories of workers may be exempt from coverage under the ESI scheme, particularly those whose daily average wage is below Rs. 176.

6. Implementation:

The implementation of the ESI scheme is overseen by the Employees’ State Insurance Corporation (ESIC), which has regional offices across India to facilitate access and administration.

 

In summary, the ESI scheme is applicable to factories and establishments with a specified number of employees and wage limits, covering a wide range of sectors while providing essential medical and financial support during times of need.

 

 

Advantages of ESIC Registration

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1. Social Security Benefits: Employees registered under the Employees’ State Insurance Corporation (ESIC) scheme are entitled to various social security benefits, including medical care, maternity benefits, and disability benefits.

2. Medical Facilities: Registered employees and their dependents can access comprehensive medical facilities at ESIC hospitals and dispensaries without any cost.

3. Financial Support during Maternity: Female employees are eligible for maternity benefits, which provide financial support during pregnancy and childbirth, ensuring job security during this period.

4. Sickness Benefits: Employees can avail themselves of cash benefits during periods of sickness, which helps in maintaining financial stability while recovering.

5. Pension Benefits: In case of permanent disablement or death due to employment injury, the insured person’s family is entitled to pension benefits, ensuring financial security for dependents.

6. Employer’s Contribution: The employer contributes a small percentage of the employee’s salary towards the ESIC fund, which provides a safety net for both employees and employers in case of unforeseen circumstances.

7. Legal Compliance: Registering under ESIC ensures that employers comply with labor laws and regulations, reducing the risk of legal issues related to employee welfare.

8. Enhanced Employee Morale: Providing social security benefits through ESIC registration can enhance employee morale and loyalty towards the organization.

9. Tax Benefits for Employers: Contributions made by employers towards ESIC are tax-deductible under income tax laws, providing financial relief to businesses.

10. Access to Training Programs: ESIC also offers vocational training programs that help employees improve their skills and employability.

 

 

Documents Required for ESI Registration

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1. Application Form: A duly filled application form for ESI registration needs to be submitted by the employer.

2. Proof of Business Registration: This could include documents like a Certificate of Incorporation or Partnership Deed depending on the type of business entity.

3. PAN Card: The Permanent Account Number (PAN) card of the business entity is required as part of the registration process.

4. Address Proof: Valid address proof of the business premises such as utility bills or lease agreements must be provided.

5. Employee Details:

   • List of all employees working in the organization.

   • Their respective details including name, age, gender, designation, and salary information.

6. Bank Account Details: A copy of the bank account statement or cancelled cheque where contributions will be deposited should be included.

7. Registration Certificate under Shops & Establishments Act (if applicable): This certificate may be required depending on local regulations governing businesses.

8. Other Relevant Licenses/Certificates: Depending on the nature of business operations (like factory license), additional licenses may need to be submitted as well.

9. Digital Signature (if applicable): For online registrations, a digital signature may be required for authentication purposes.

10. Photographs (if needed): Recent passport-sized photographs of authorized signatories may also be necessary in some cases.

 

 

Penalties for Non-Compliance with ESI Regulations

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1. Financial Penalties:

   • Employers who fail to comply with the ESI Act may face substantial fines.

   • The penalties can accumulate daily based on the duration of non-compliance and the total contributions due.

2. Imprisonment:

   • Individuals responsible for non-compliance may be subject to imprisonment.

   • For example, failure to pay contributions can lead to imprisonment for up to three years.

3. Legal Proceedings:

   • The Employees’ State Insurance Corporation (ESIC) can initiate legal action against non-compliant employers.

   • This involves court appearances and hearings, which can be time-consuming and costly.

4. Recovery of Dues:

   • ESIC has the authority to recover unpaid contributions from employers.

   • This recovery process adds financial strain on the employer.

5. Negative Reputation:

   • Non-compliance can damage an employer’s reputation in the business community.

   • A tarnished reputation may affect business partnerships and future hiring prospects.

6. Disqualification from Government Tenders:

   • Many government contracts require proof of compliance with ESI regulations.

   • Non-compliance could lead to disqualification from participating in these opportunities.

7. Litigation and Lawsuits:

   • Employees have the right to approach labor courts regarding grievances related to ESI non-compliance.

   • Legal battles may result in compensation or damages payable by the employer.

8. Business Disruption:

   • Legal issues and penalties can disrupt normal business operations.

   • This disruption diverts resources away from core activities, hindering growth prospects.

9. Enhanced Penalties for Repeat Offenses:

   • If an employer is convicted of a similar offense after a previous conviction, penalties increase significantly.

   • Subsequent offenses related to non-payment of contributions can lead to imprisonment for two to five years and higher fines.

To avoid these penalties, employers should ensure timely filing of ESI returns, maintain accurate records, stay updated on regulations, and seek professional guidance when needed.

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