ESI rules and obligations for employers

In this post, we have covered about the obligations the employer has with respect to ESI.

This covers the general guidelines on ESI for the employer.

The first step is recognizing if your company or establishment is applicable under the ESI scheme. The ESI Act states that it is mandatory for any establishment employing 10 or more people to be registered under the ESI Act.

If your establishment or organization does fall under this criterion, then get your establishment registered within 15 days after the Act becomes applicable.

For registration, submit Form 01 to the regional ESI office. The declaration forms of all coverable employees have to be filled and submitted to the regional office as well. The declaration form is called as Form 1.

In the case of newly appointed employees, he/she has to fill and submit the declaration form to the concerned local office soon after the appointment of such employees.

Note: Employees whose gross earnings are less than Rs. 21, 000 is applicable for ESI.

Once registered under this act, you will be provided with the Employer’s code or number. This number is to be used for all ESI related forms or documents and correspondence with the ESI Corporation.

In case of a new joining employee who does not have an identity card or identity certificate, a certificate of employment as Form 86 can be issued. It enables them to avail cash / medical benefits.

FAQs

What is the Code number of ESI?

Every factory or establishment that is registered under the Act is allotted a unique 17-digit identification number. This number is generated through the ESIC portal when the employer submits the relevant information or upon receipt of the Survey Report from the Social Security Officer.

What is a Sub-code number?

Each office or sub-unit of a covered factory or establishment has a unique identification number. The employer can register any office through the ESIC Portal using their credentials and primary registration code number.

What are the records to be maintained for ESI purposes? 

To comply with ESI regulations, employers must maintain 

• muster roll, 
• wage record, and 
• books of account – an accident register, an inspection book, and an employees’ register for those assigned to the principal employer.

If an employee’s monthly salary exceeds Rs. 21,000, can their contribution deduction be stopped?

If an employee’s wages (excluding overtime) exceed the government’s limit during the contribution period, they remain an employee until period end. Contribution is then deducted and paid on total wages earned.

Is there any provision for ‘exemption of a factory or establishment’ from ESI coverage? 

Employees in a covered factory or establishment can be exempt from the ESI Act if they receive benefits similar or better than those provided under the Act. The government can grant exemptions for one year at a time, after consulting with the ESI Corporation. Exempted units must apply for renewal at least three months before the previous exemption expires.

What is the time limit for contribution?

Payment for an authorized bank employee must be made within 15 days of the contribution due date.