ESI Registration in Delhi

What is Employees' State Insurance Corporation (ESIC)?

Employees' State Insurance Corporation, or ESIC, is a self-financing social security and health insurance scheme which provides medical benefit, sickness benefit, maternity benefit, disablement benefit, and various other benefits such as funeral expenses and free supply of physical aids to employees and their families.

Units or establishments in Delhi and across India that have 10 or more employees (20 or more in certain states) drawing wages up to Rs. 21,000 a month are required to be registered under the ESI Act, 1948. The benefits provided by the scheme are funded from contributions raised from covered employees and their employers at a fixed percentage of wages. At present, covered employees contribute 0.75% of their wages to the ESIC and covered employers contribute 3.25% of the wages payable to their employees, making a total contribution of 4%. The state government also contributes to the cost of medical benefits. LegalTax assists businesses in Delhi with end-to-end ESI registration.

Benefits of ESI Registration

ESI Registration ensures that employees enjoy the following advantages under the Employees' State Insurance scheme:

Medical Aid

From the very first day of employment, registered ESI members and their families are entitled to enjoy the benefits of complete medical care and insurance.

Maternity Benefit

Pregnant women are entitled to maternity benefits payable for up to 26 weeks. This period can be extended by 30 days on medical advice. To qualify for maternity benefits, an employee is required to have contributed wages for at least 70 days in the preceding two contribution periods.

Disablement Benefits

Employees who suffer a disablement due to an employment injury can get up to 90% of their average daily wages as disablement benefit, depending on the extent of disability.

Sickness Benefits

Absence from work during certified illness can be availed for a maximum of 91 days in two consecutive contribution periods, along with roughly 70% of the average daily wages.

Dependent Benefits

In the unfortunate event of the death of an employee during employment due to an employment injury, the dependents of the deceased receive a monthly pension representing a share of the employee's average daily wages.

Funeral Expenses

The family of the deceased employee is entitled to a fixed amount towards funeral expenses, as revised from time to time by ESIC.

Confinement Expenses

In case of confinement of an insured woman, or the wife of an insured employee, occurring at a place with no medical facilities under the ESI scheme, confinement expenses can be availed.

In addition, some need-based benefits include:

Vocational Rehabilitation

Permanently physically challenged insured employees are entitled to undergo vocational rehabilitation training at Vocational Rehabilitation Centres (VRCs).

Physical Rehabilitation

Available to employees in case of physical disablement due to an employment injury or occupational hazard.

Old Age Medical Care

On payment of a nominal annual contribution, retired and permanently disabled insured persons (and their spouses) can continue to avail medical care benefits under the scheme.

Extended Sickness Benefit

ESI members suffering from certain notified long-term diseases can avail extended sickness benefit for up to two years, once the standard 91-day sickness benefit period is exhausted. Eligibility generally requires the insured person to have been in insurable employment for a minimum continuous period before the onset of the disease.

Enhanced Sickness Benefit

This benefit is available to insured persons undergoing sterilisation (vasectomy or tubectomy) for family planning purposes. Eligible members can avail enhanced sickness benefit at a higher rate than the standard sickness benefit, along with a recuperation period — typically a few days for vasectomy and a slightly longer period for tubectomy from the date of the procedure. Extension of this benefit may also be available in case of post-operative complications.

Eligibility / Entities Covered under ESIC Registration in Delhi

As per the ESI Act, 1948, establishments in Delhi are eligible and required to register for ESI provided they meet the applicable employee-strength threshold. The entities typically covered include:

• Shops
• Cinemas
• Movie theatres
• Medical institutions
• Hotels and restaurants
• Newspaper establishments
• Private educational institutions
• Roadside motor transport establishments

Eligibility Criteria for ESI Registration

The general rule to be eligible for ESI registration is to have 10 or more employees (this threshold is 20 or more employees in some states). Other eligibility criteria that need to be fulfilled are:

• Any employee whose gross monthly salary is up to Rs. 21,000 (Rs. 25,000 for employees with disabilities) must be covered under ESI by the employer.
• The establishment must be registered with the ESIC and comply with applicable labour law registrations such as the Shops and Establishment Act or Factories Act.
• The total contribution to ESI is 4% of the gross wages, divided as:
  • 3.25% by the employer
  • 0.75% by the employee

For industrial units where there is a higher risk of injury or occupational health issues at the business premises, all employees drawing wages up to the prescribed threshold must compulsorily be covered under ESI.

Documents Required for ESIC Registration in Delhi

The documents required for ESI registration typically include:

1. A registration certificate obtained either under the:
   1. Factories Act, or
   2. Shops and Establishment Act (as applicable in Delhi)
2. Certificate of Incorporation in case of a company, or Partnership Deed in case of a partnership firm
3. Memorandum of Association and Articles of Association of the company
4. A list of all employees working at the establishment
5. PAN card of the business entity as well as all employees working under the entity
6. Compensation details of all employees
7. A cancelled cheque of the company's bank account
8. List of directors of the company
9. List of shareholders of the company
10. Register containing the attendance of employees

After collecting all the above-mentioned documents, the following procedure is generally followed:

1. Form No. 1 (Employer's Registration Form) is filled out.
2. The form is submitted online along with the above-mentioned documents through the official ESIC portal, following which a 17-digit registration number is generated for the establishment.

FAQ's on ESI Registration in Delhi

Q. What is the Insurance Number under ESI?

To identify each employee, the ESI scheme allots a unique identification number to every insured worker. This number is called the Insurance Number and is used for all operational purposes, including claiming benefits.

Q. Who mandatorily requires ESI registration in Delhi?

Every shop, establishment, and factory in Delhi employing 10 or more eligible employees (subject to the applicable wage threshold) is required to register under the Employees' State Insurance scheme.

Q. Does ESI registration provide any pension benefit?

Yes, in the event of the death of an insured employee due to an employment injury, their dependents are entitled to a monthly dependents' benefit, which functions as a form of family pension under the scheme.

Q. What are the other incentives for ESI members?

ESI members are entitled to benefits such as unemployment allowance under the Atal Bimit Vyakti Kalyan Yojana, maternity benefit for female employees, and disablement benefit, among others.

Q. What are the overall benefits of ESI registration?

ESI confers on employees a wide range of benefits such as medical benefits, disablement benefits, dependents' benefits, sickness benefits, and maternity benefits.

Q. How can LegalTax help with ESI registration in Delhi?

LegalTax assists businesses across Delhi NCR in preparing and filing ESI registration applications, compiling the required documentation, enrolling employees, and staying compliant with ongoing contribution and filing requirements under the ESI Act.