Read this blog to know everything related to the eligibility that’s required for ESI registration in India.
The Employees State Insurance (ESI) Scheme is among the most well-liked programmes in India among workers. The programme is available to all staff working throughout India’s many industries. A Self-Financing Security and Labor Welfare Organization Body is known as ESIC oversees and regulates the programme. The Indian ESI Act of 1948’s guidelines and rules must be followed by the governing board.
You can submit an application for ESI registration at ESIC, which stands for Employee’s State Insurance Corporation. For its workers, ESI Registration provides a wide array of financial, common medical, and other advantages.
The ESI Act – Definition of Establishments
According to the ESI Act, an establishment is any organised group of men or women or an institution, regardless of whether they are located in a specific location or not. As a result, an establishment would need to register for ESI if it employed 20 or more people. Establishments with fewer than 20 employees who make less than Rs. 21,000 a month in salary are exempt from registering for ESI.
According to the ESI Act, stores must also be registered. According to the Supreme Court, the ESI Act is a useful piece of law, hence the phrase “shop” must be interpreted broadly. Additionally, the Supreme Court has ruled that a “store” encompasses any location where commercial actions that result in a sale or purchase are conducted. Therefore, providing services to the consumer is a shop’s primary defining characteristic. Therefore, if other requirements are met, service providers such as advertising agencies, liaison offices, consultant service providers, estate service providers, and more will need to seek ESI registration.
However, Chartered Accountants & private commercial hospitals are not included when examining the coverage of stores, academic facilities, hospitals, clinics, offices of Auditors and Solicitors.
The minimum number of employees needed to register for ESI
In addition to the people who are directly employed, the following groups of people must be tallied in order to assess if a factory or facility is covered by ESI:
- People who are employed at a factory and are on paid or unpaid leave.
- A replacement or badli worker who is paid.
- Directors who receive compensation from a corporation.
- Individuals receiving monthly wages of more than ₹ 21,000 but who are otherwise uncoverable.
- Individuals who are employed by or through a contractor are directly supervised by the employer.
- For the purpose of calculating the coverage of a manufacturing unit or an establishment, the number of apprentices or trainees undertaking training and studying the craft under a recognized scheme will not be considered.
What are the benefits of ESI registration?
If your business employs more than ten people at a monthly income of less than ₹ 15,000, you must register for ESI registration. Once the regulatory body has been registered, ESIC will identify your employment firm and assign a 17-digit unique identification number.
Every one of the registered companies must contribute roughly 4.75 percent of the total monthly income of their workers to be able to qualify for the perks under the plan. On the other side, each month, 1.75 percent of the qualified employees’ monthly salaries must be paid into the firm’s ESIC funds.
Following are the ESIC Registration Compliances
After becoming registered with the ESIC, the establishment must adhere to the following:
- Keeping the attendance record up to date.
- Keeping an accurate record of employee pay.
- Checklist book.
- Within 15 days of the following month’s 15th, the monthly return and challan.
- Keeping a register that details any mishaps that occurred on the property.
Returns Needed Following ESIC Registration
Employers are required to submit ESI Returns biannually following ESIC registration. The following papers must be included with the returns:
- Register of employees’ attendance.
- Register on Form 6.
- Record of wages
- Keep track of any accidents that have occurred on the company’s property.
- Challans and refunds that are due each month.
What is the eligibility for ESI registration?
You must meet the following requirements in order to be eligible for all of the ESI scheme’s perks:
- Any person employed by a factory or company with more than 10 employees is qualified under Section 2(12) of the ESI Act, 1948.
- All workers in a variety of industries, such as those employing more than 20 people in eateries, hotels, transportation firms, news outlets, theatres, and movie theatres, are eligible.
- All workers must make a minimum payment of ₹ 10,000 in order to be eligible for the full range of social security benefits under the programme.
- Regular employees are only covered ₹ 21,000 per month, whereas employees with disabilities are covered ₹ 25000 per month.
Employers who are ESIC-registered must pay simple interest at the rate of 12% per year for each day that the contribution is late or not paid when they fail to make the required contribution toward the ESIC of an employee. If you wish to know more about this, get in touch with the experts of Vakilsearch. You can also claim your ESI through us.
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