The government introduced the Employee State Insurance (ESI) scheme for Indian workers, managed by the Employee State Insurance Corporation (ESIC). ESIC, an autonomous body established by law under the Ministry of Labour and Employment, Government of India, provides various benefits to covered employees, including medical care, sickness allowance, maternity benefits, disability benefits, and dependent benefits. Read this article to learn about the ESIC registration process, benefits, document requirements, and eligibility criteria for both employers and employees.
Who needs ESIC registration?
Under the Employees’ State Insurance (ESI) Act, 1948, registration is mandatory for all factories and establishments—including private educational institutions—that employ more than 10 people (or 20 employees in certain states). This requirement applies to all businesses that fall under the scope of the Employees’ State Insurance Corporation (ESIC).
Employees earning up to Rs. 21,000 per month (or Rs. 25,000 in the case of employees with disabilities) are eligible to receive benefits under the ESI scheme.
Employer contributions and registration process
As the first step in the registration process, employers must contribute a specified percentage of each eligible employee’s wages to the ESI scheme. These contribution rates are defined by the Ministry of Labour and are shared between the employer and employee, with the employer bearing a larger portion. The contributions fund essential benefits like medical care, disability compensation, and maternity coverage.
To complete ESI registration, employers need to provide key documents such as:
- PAN card of the business
- List of employees with salary details
- Articles of Association or relevant incorporation documents
The entire process can be completed online via the official ESIC portal, where a unique 17-digit Registration Number is generated for each establishment. Registered employers can manage their contributions, update records, and ensure compliance through the Employer Login on the ESIC platform.
Compliance and ongoing requirements
To stay compliant, employers must furnish additional details such as:
- Details of the establishment’s health insurance plan (if applicable)
- Any required declarations as per state or central government guidelines
This applies to businesses under the Factories Act or any relevant establishment laws, including sectors like private education.
ESIC eligibility criteria for online registration
Any non-seasonal factory or establishment with more than 10 employees (20 in some states) earning a maximum basic wage/salary of Rs. 21,000 per month (Rs. 25,000 for persons with disabilities) must register with the ESIC within 15 days of becoming applicable.
Under the ESI scheme, employers contribute 3.25% of the total monthly wage payable to the employee, while employees contribute 0.75% of their monthly wage. Employees earning less than Rs. 176 per day are exempt from contributing.