ESIC Registration, Applicability and Benefits
- What is ESIC?
- Applicability of ESIC
- Required Documents for ESIC Registration
- ESIC Contribution rates and Deposit rule
- ESIC Registration Benefits
What is ESIC?
ESIC Stands for Employee State Insurance (ESI), Basically ESI managed by govt. of India and its all administrative activities covered under Employee Insurance Act 1948 .This is a social security scheme where employee has so many benefits related to medical and cash such as Sickness, Maternity, Disability, Death at the time of employment, Unemployment Etc. It provides protection from health related calamities for more than 2 crore employees and their families. In addition to this, there are more than 150 Hospitals and 15000 dispensaries are working across the country.
Applicability of ESIC
Now the question is which establishment is needed to be registered under ESIC scheme for the proper fulfillment of all adviseriese this Act will applicable to all factories and other establishment which cover under this Act.
Now we understand what the ESIC applicability criteria are.
- If total number of employee more than 10 is working in an establishment than ESIC registration is applicable for the establishment. However In case of Maharashtra and Punjab require minimum to 20 employees for coverage for this Act.
- Minimum monthly wages of an employee must be less than Rs. 21000.
On 1st January 2017 the amount of Rs. 21000/- is amended earlier the limit was Rs. 15000/-
If the establishment cover once in this act will always be covered in this act, even if the number of employee goes below than the required limit i.e. 10 or 20 as required.
If the employee wages of Rs. 21,000 is increased due to any reason, then employee continues to be covered under the scheme.
Person who are not covered under this scheme
- Proprietor or Partner
- Person engaged on a contractual basis (i.e.- Tax Consultants, Legal Consultants)
- Apprentice covered under Apprentice Act, 1961
Required Documents for ESIC Registration
- Registration Certificate issued under shops and Establishment or Factory act.
- Partnership deed for Partnership Firm/Memorandum and Article of Association in case of company/Trust deed for trust.
- GST Certificate (if available).
- List of Partners/Directors.
- PAN of the Establishment.
- Address proof of the Establishment.
- Bank statement/ Cancelled cheque of the Establishment.
ESIC Contribution (Employee and Employer)
Total deduction made by employee and employer is 4% and Employer deducts the amount on behalf of employee. Where the contribution of employee is 0.75 % and employer contribution is 3.25 % of the gross salary.
The Contribution should be deposited to the Govt. to 15 day of every month, For Example: If ESI Contribution is due for the month of March, then it should be deposited in 15 Day of Next Month (i.e. 15 April)
If the establishments fail to deposit the contribution within the due date or non deposit of contribution is a punishable offense and it’ll attract an interest of 12% per annum.
ESIC registration Benefits
There are several benefits available given below:
- Medical Benefits: ESIC Provides to employee medical benefit starting from date of employment and also cover medical benefits to his family.
- Sickness Benefit: if the employee in a medical leaves then 70% of average daily wage will be provided in cash for 91 days in two consecutive benefit periods.
- Maternity Benefit: Under this benefit is provided 100% average daily wage for mother up to 26 weeks, for 6 weeks in case of miscarriage, 12 weeks for a commissioning mother/adopting mother.
- Disability Benefit: ESIC grants monthly payment in case of temporary disablement till injury lasts and lifelong in case of permanent disablement.
- Dependants’ benefit: In case of death due to employment injury, the monthly payment is granted to dependants. Also, the funeral expenses are born by the ESIC
- Unemployment Allowance: if the case is of involuntary loss of employment, ESIC provides for monthly cash allowance for duration of 24 months (maximum).
ESIC provide heath security to employees and their dependent families. The scheme provides to the employees medical and cash benefits with the very low amount.