Employee State Insurance (ESI Registration)

The sub-code number is also a unique identification number that is allotted to a sub-unit, branch office, etc. of a covered establishment or factory based in a different state or same state.

To recognize each employee, the ESI scheme allots a unique identification number to every worker. This number is called the insurance number and is used for all operational purposes.

1. Sickness Benefits- Sickness benefit @ 70% of his salary in case of any certified illness leading to absence from workplace and which lasts for a maximum of 91 days in a year.
2. Maternity Benefits- Pregnant women are entitled to maternity benefits that are payable up to 26 weeks. This period can be extended by 30 days on medical advice.
3. Unemployment Allowances- Under Rajiv Gandhi Sharmik Kalyan Yojana, unemployment allowance equal to 50% of wages is paid to an insured employee who becomes unemployed due to closure of factory/ establishment, retrenchment. Further, under Atal Beemit Vyakti Kalyan Yojana, cash compensation is payable to unemployed individual for a period up to 90 days, once in a lifetime.
4.  Medical Benefits- Full medical care is provided to an insured person and his family members. There is no ceiling on such medical expenditure. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs. 120.
5. Confinement Expenses- In the case of confinement of an insured woman or wife of an employee occurring in a place with no medical facilities, confinement expenses can be availed.
6. Funeral expenses- An amount of Rs. 15,000 is payable to the dependents or to the person who performs last rites.
7. Disability benefits- In case of permanent disability, the insured person is payable 90% of his salary as a monthly payment. Similar benefit is given in case of temporary disability for the period disability continues.
8. Dependants benefits- 90% of wages is paid on monthly basis to the dependants of a deceased insured person in case death occurs due to employment injury or occupational hazards.
9. In addition to above various other vocational and physical rehabilitation benefits, extended/enhanced sickness benefits are also available to insured person.

• All factories employing 10 or more employees
• All other specified establishments having 10 or more employees (in some states limit is 20 employees) as below:-
  • Shops
  • Cinemas
  • Newspaper Establishments (that is not covered under Factory Act)
  • Hotels & Restaurants providing services & not carrying out any manufacturing activities
  • Medical Institutions
  • Private Educational Institutions
  • Roadside Motor Transport Establishments

But ESI contribution is deducted only for those employees having a monthly salary upto Rs. 21,000. For industrial units where there are chances of injuries, all employees with salary less than Rs. 21,000 compulsorily need to have an ESI.

If employee strength reaches 10, the establishment is required to register with ESIC within 15 days. Failure to comply with the provision can invite penalty, and it also amounts to criminal offences which is punishable under section 85 of the act.

W.e.f. 01-07-2019, the rate of contribution to ESIC is 4% of which employee’s contribution is 0.75% of wages and employer’s contribution is 3.25% of wages. The rate is changed from time to time. Employees in receipt of a daily average wage up to Rs. 137 are exempted from payment of contribution. However, employers will contribute their own share in respect of those employees.

            Wages for this purpose include basic pay, dearness allowance, city compensatory allowance, overtime wages, HRS, incentive, bonus, meal allowance etc.

If the employer fails to pay the online contribution within 15 days of the end of the month, shall be liable to pay interest @ 12% p.a. for each day of such default in contribution.

• ESI payment to be deposited by 15th of every month

Once registered under ESI, all the compliances need to be done in spite of the fact that the number of employees reduces from 10.

Registration under ESI cannot be cancelled until and unless the entity winds up the business and closes down. ESI Commissioner can consider special cases where employer undertake that there is no employee left, and in future, no employee will be hired. After the presentation of all relevant documents to the satisfaction of the commissioner, cancellation may be granted.

The ESI benefits include medical, cash, maternity, disability and dependent benefits to the insured persons under the ESI Act. The ESIC scheme provides medical benefits to an employee and his dependent family members (including parents).

Contribution paid against one insurance number cannot be transferred to another number.

As per the ESIC Act, an employee needs to take the medical benefits only from the ESIC dispensaries or hospitals. In case of emergency or in case of non-availability of ESIC facility in specific region, an employee can take the treatment from the private hospital with prior approval from ESIC.