Employee State Insurance (ESI)

ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation which is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India.

This scheme is started for Indian workers. The workers are provided with a huge variety of medical, monetary and other benefits from the employer. Any Company having more than 10 employees (in some states it is 20 employees) who have a maximum salary of Rs. 15000/- has to mandatorily register itself with the ESIC.

Under this scheme, the employer needs to contribute an amount of 4.00% of the total monthly salary payable to the employee whereas the employer needs to contribute only 1.00% of his monthly salary every month of the year. The only exemption to the employee in paying his contribution is whose salary is less than Rs. 100/- per day.

ESI Registration Procedure: Documents Required

The following documents are required for registering under the ESI scheme:
1. A registration certificate or a license obtained under Shops and Establishment Act or Factories Act;
2. Certificate of registration (Memorandum and Articles of Association in case of a private limited company, partnership deed for LLPs, etc);
3. Certificate of registration for all entities and commencement of production for factories;
4. A list of employees with their monthly compensation, in detail;
5. A list of directors, partners and shareholders of the company;
6. The PAN card of the business and address proof of the establishment/firm;
7. Bank statements of the organization, with evidence of commencement of operation.

Benefits of ESIC registration

The benefits of registering under this scheme are varied.

  • Sickness benefits at the rate of 70% (in the form of salary), in case of any certified illness certified and which lasts for a maximum of 91 days in any year

  • Medical Benefits to an employee and his family members

  • Maternity Benefit to the women who are pregnant (paid leaves)

  • If the death of the employee happens while on work – 90% of the salary is given to his dependents every month after the death of the employee

  • Funeral expenses

  • Old age care medical expenses