Legal Provisions of ESI
Process of ESI Registration
There are generally no compulsory registrations required to be taken by the Sole Proprietor. However, following voluntary registrations may be taken if the owner wishes to expand the business:
The Ministry of Labour & Employment has developed a unified Web Portal 'Shram Suvidha' portal for registration under The Employees Provident Funds And Miscellaneous Provision's Act (EPF) Act-1952. User is required to register himself on the same.
After Employer Registration, DSC Registration is required for submitting a fresh application for EPF Registration.
The application needs to be filled where all the basic details are required to be entered such as Name of Entity and PAN etc.
After filling the application, final submission is made on the portal. Thereafter, registration certificate is issued by the department.
Registration Certificate obtained either under the Factories Act or under the Shops and Establishment Act.
Certificate of Incorporation
Certificate of Incorporation in case of Company; Partnership Deed in case of Partnership.
List of shareholders and directors
List of shareholders and directors of the company.
Memorandum and Articles
Memorandum and Articles of Association in case of company.
Cancelled Cheque of Bank Account of Company.
Address Proof, PAN Card and updated Bank Statement of the business entity.
Register Containing Attendance
Register containing attendance of the employees.
Employees PAN Card
PAN Card of all the employees working in the entity.
Compensation Details of all the employees.
List of all the employees
List of all the employees working in the establishment.
- Who should get this registration?
ESI Registration is required when a company/firm/organisation employs 10 or more persons, with individual wage/salary falling under the threshold limit of INR 21,000 per month. After registration, ESIC gives recognition to the employing entity and its employees through allotting a seventeen-digit unique identification code.
- Why should you get this registration?
The non-registration attracts penalties whereas the registration offers numerous benefits:
- Medical benefits and facilities to employees and their families.
- Sickness benefits in the form of salary @70% in case of certified sickness lasting for a maximum of 91 days in a year.
- Maternity benefits to pregnant women employees in the form of paid leaves for three months.
- 90% of salary of deceased employee paid to his/her dependents every month in case of death of an employee caused by any occupational hazard.
- Old age care medical expenses met.
- Disability to work paid @90% of the monthly salary of the concerned employee.
How StartUp Movers can help you?
HOW STARTUP MOVERS CAN HELP YOU?
- Obtaining ESI Registration
- Assistance in ESI Payment
- Computation of ESI
- Payroll Management
- Filing of ESI Returns
Frequently asked questions
It is the statutory responsibility of the employer under Section 2A of the Act read with Regulation 10-B, to register their Factory/Establishment under the ESI Act within 15 days from the date it crosses the employee threshold of 10.
Yes. The exemption is permissible from operation of provisions of the Act subject to the condition that the employees in a covered factory or establishment are other-wise in receipt of benefits substantially similar or superior to those provided under the ESI Act. The appropriate Government may grant exemption to such factory or establishment for a period of one year at a time prospectively in consultation with ESI Corporation. An exempted application unit has to apply for renewal three months before the date of expiry of the prior exemption.
Contribution shall be paid in respect of an employee in a bank duly authorized by the Corporation within 15 days of the last day of the calendar month in which the contribution falls due for any wage period.
An employer who fails to pay the contribution within the limit prescribed under Regulation 31, shall be liable to pay simple interest at the rate of 12% per annum in respect of each day of delay or default in payment of contribution.
Following entities are covered for getting the ESIC Registration done basis the notification issued by the Government under Section 1(5) of the Act:
- Restaurants or Hotels engaged in sales
- Road Motor Transport Establishments
- Newspaper Establishments, not covered under Factories Act
- Private Educational Institutions
Can a factory or establishment once covered go out of coverage if the number of persons employed therein goes down to the minimum limit prescribed?
Once a factory or an Establishment is covered under the Act, it continues to be covered notwithstanding the fact that the number of persons/ coverable employees employed therein at any time falls below the required limit or there is a change in the manufacturing activity.
In case the wages of an employee are increased from a retrospective date resulting in crossing the wage limit prescribed, its effect on coverage of that employee is only after expiry of the Contribution period during the currency of which such increase is announced or declared. The contribution on enhanced wages is also payable from the month in which such increase is announced. There is no need to pay the contribution on the arrears for the period prior to the month of declaration/ announcement/ agreement.
Any sum deducted by the Principal employer from wages under the ESI Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted as per Section 40 (4) of the ESI Act,1948. Non-payment or delayed payment of the Employee’s contribution deducted from the wages of the employee amounts to ‘ Breach of trust’ and is punishable under IPC 406, 409 and also an offence u/s 85 of ESI Act.
For ESI compliance the employer has to maintain following records:
- Muster roll, wage record and books of Account maintained under other laws.
- Accident Register in new Form-11.
- An inspection book.
- The immediate employer is also required to maintain the Employees’ Register for the employees deployed to the principal employer.