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ESI

ESI (Employees’ State Insurance) registration is the process through which employers register their establishments and employees under the Employees’ State Insurance Act, 1948, a landmark legislation designed to provide social security and healthcare benefits to workers in India. The ESI scheme is a comprehensive social protection program that offers medical, monetary, and other welfare benefits to employees and their dependents in times of sickness, maternity, disability, or employment-related injury. It is administered by the Employees’ State Insurance Corporation (ESIC), an autonomous statutory body functioning under the Ministry of Labour and Employment, Government of India. The ESI scheme aims to safeguard employees against financial distress arising from unforeseen health issues or loss of income. It applies to all factories and specified establishments such as shops, hotels, cinemas, educational institutions, and other organizations that employ 10 or more persons (in some states, the threshold is 20) and where employees earn a monthly wage of ₹21,000 or less (₹25,000 for persons with disabilities). The benefits of ESI registration extend beyond medical coverage. It includes sickness benefits (paid leaves during illness), maternity benefits, disablement benefits, dependents’ benefits (in case of death due to employment injury), and funeral expenses, ensuring holistic welfare for workers and their families. Moreover, ESIC also promotes preventive healthcare through periodic medical check-ups and awareness programs.The registration process is completely online through the ESIC portal, making it efficient and transparent. Employers must furnish business details, employee data, and wage information to obtain registration and ensure timely contribution submissions.

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Description

ESI registration is mandatory for establishments with 10 or more employees (in some states, it is 20 or more employees) where the wage limit of employees is up to Rs. 21,000 per month. Once registered, the employer needs to contribute a percentage of the employee's salary to the ESI fund, and the employees also make a nominal contribution.

The benefits provided under the ESI scheme include medical care, sickness benefits, maternity benefits, disablement benefits, dependent benefits, and funeral expenses. It aims to provide financial and medical assistance to employees and their dependents during times of need, such as illness, injury, maternity, or death.

The process of ESI registration involves submitting an application along with required documents such as proof of incorporation, establishment's address proof, PAN card, list of employees, etc., to the concerned regional office of the ESIC. Once the application is processed and approved, the employer is issued an ESI registration number, and they are required to comply with the rules and regulations outlined by the ESIC, including timely payment of contributions and filing of returns.


Frequently Asked Questions

Browse practical answers curated by our CA and CS desks for ESI.

Eligibility & Applicability
Documents, Process & Timeline
Compliance, Obligations & Risks

Eligibility & Applicability

An establishment must register under the ESI scheme if it employs 10 or more employees (in some states 20) and the scheme applies under the Employees’ State Insurance Act, 1948.

Employees whose monthly wage is up to ?21,000 (or in case of persons with disability up to ?25,000) are eligible to be covered under the scheme.

If the employee count is under the threshold, registration is not mandatory — although voluntary registration may still be chosen.

The scheme applies to factories, shops, hotels, restaurants, cinemas, educational institutions, transport undertakings, etc., when they meet the eligibility criteria.

Documents, Process & Timeline

 Typical documents include: proof of establishment registration (Factories Act / Shops & Establishment), PAN of employer, address proof, bank account details, list of employees, and identity proofs.

Registration is done via the ESIC portal: create employer account ? fill Form 1 with establishment/employee info ? upload documents ? submit and receive unique registration code.

Once all data and documents are submitted correctly, the system generates the registration code almost immediately upon verification and payment of required advance contributions

After employer registration, eligible employees must be registered (each gets an ESI number) so they can access benefits under the scheme.

Compliance, Obligations & Risks

The employer must deduct employee share, contribute employer’s share monthly, file contributions/returns, maintain registers, report injuries, and ensure covered employees are enrolled.

 Non-registration can lead to penalties, interest on unpaid contributions, legal action by ESIC, and loss of benefit to employees.

 Yes — if employee strength, wages, business address or other details change, the employer must update the registration and ensure compliance accordingly.

 Registration must be accurate and maintained — mis-registration, or incorrectly declaring non-coverage may still lead to liabilities and assessments by ESIC.

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