One of the most significant pillars in India for social security is ESI and EPF, Employees’ State Insurance and Employees Provident Fund. It is well-structured to offer large-scale health and financial benefits to workers in the organised sector. This ESI scheme, based on the Employees’ State Insurance Act, was established in 1948 and is intended to cover employees against all possible health risks, including maternity, disability, health hazards, and injuries resulting from occupational hazards.
It is to manage such a system that the Employees’ State Insurance Corporation (ESIC) was established. It is an autonomous body under the Ministry of Labour and Employment. In contrast, the ESF serves as the financial backbone of the ESI scheme by raising the contributions of both employers and employees to finance the payable benefits. Contributions are made mandatory for enterprises falling under specific criteria to cover large-scale, eligible workers.
With the integration of medical care and financial assistance, the ESI/ESF scheme aims to establish a network of security for workers, providing improvements in welfare and alleviating financial burdens during crises. This represents another step toward a comprehensive social welfare system that ensures equal access to essential services, ultimately enhancing productivity and workforce quality. It has now become one of the pillars of Indian labour policy, lightly affecting millions of workers and their families nationwide.
Registration of ESI and its Applicability
The ESI is a social security measure established with the objective of protecting employees in some regions of the Indian economy from both health and financial hazards. It was instituted by the Employees’ State Insurance Act of 1948, which details how to enroll in the scheme from both the employer’s and employee’s perspectives.
1. Eligibility for Employers
The following types of establishments would fall within the ESI scheme:
Any factory that has employed ten or more persons, including factories employing power.
Shops and other establishments employing ten or more persons
Even shops, hotels, restaurants, cinemas, and transportation companies fall within the purview of the regulation, which typically applies to establishments with more than ten employees in most regions. Other states may even have a limit of twenty employees.
Private education and health institutions with a strength of ten employees or more.
Employers fulfilling all of the above conditions are liable to enrol for ESI even if some workers cross their ESI wage ceiling.
2. Eligibility for Employees
The ESI scheme offers benefits to employees who fulfill any of the following criteria:
The monthly remuneration should not exceed Rupees Twenty-One Thousand (basic pay plus DA) for any employee; for a disabled person, it is Rupees Twenty-Five Thousand.
Employees include contract workers, casual labourers, and temporary employees if their remuneration is less than or equal to the limits fixed by law.
3. Geographical Eligibility
The ESI scheme is applicable to regions where the government has implemented it. The scheme is already operational across all the major cities and industrial states of India. Hence, the employers shall ensure compliance as far as their operations are located within the mentioned regions.
As such, companies eligible under the provisions of the Employees’ State Insurance Act of 1948 are automatically put under compulsory registration under the Employees’ State Insurance scheme. This guarantees employees at the establishment access to ESI benefits, as registration is provided.
Most states require employers to register for ESI if they have ten or more workers (or twenty in certain states). The benefit provides coverage for all employees who earn below Rupees Twenty-One Thousand per month (Rupees Twenty-Five Thousand in the case of disability). Generally, these include industries, retail stores, hotels, cinema halls, transportation companies, media houses, and educational and healthcare institutions.
Below is a comprehensive registration process:
All ESI Registration actions are now performed online on the Employees’ State Insurance Corporation (ESIC) portals. The steps include the following:
- Go to ESIC Portal – Go to www.esic.gov.in, clicking on the “Sign Up” under the employer login section.
- Apply for a Login ID – Providing the employer name, company name, email address, and mobile number will enable you to set up your login ID. The system will send a confirmation email with your login information.
- Filling up Employer Information – You log in to the portal with your username and password. You fill out the employer’s registration form, and you need to provide the employer’s name and address of establishment, the nature of business or activity, the Employer’s PAN, bank account details, and also the number and salary of employees.
- Uploading required documents – Prepare all documents to be uploaded, such as the employer/firm PAN card. Provide proof of establishment under the Companies Act/ Shops and Establishment Act/ Factory Act. The business address will be verified using a utility bill or lease agreement, along with a list of employees and their corresponding salary information.
- Contribution – After completing the registration process, the employer is liable to deposit 3.25 percent of each employee’s salary into the ESI fund. 0.75 percent will be deducted from the salary contributed by the employee.
- Get Employer Code – At this stage, the ESIC system will assign a unique 17-digit identification number to the employer called the Employer Code Number anytime after the successful submission and approval. This code will be used for all further transactions with the ESIC.
4. Employee Insurance Number Issues
Enrolment of all eligible employees in ESI will, in actuality, be the responsibility of the employer. Each employee shall have a unique number under the ESI, referred to as a Pehchan card, which serves as an identity card for accessing all medical and other benefits.
5. Compliance and Record Keeping
Once registered, employers are liable to fulfill obligations such as submitting ESI contribution returns on time, maintaining accurate records of employees’ remuneration and contributions, and prominently displaying the ESI registration certificate at the workplace.
As a part of the necessary law, the ESIC registration process is crucial in ensuring that workers benefit from the various aspects of social security benefits as provided by ESIC. It highlights the employer’s responsibility to promote the health and economic well-being of employed persons.
Registration of EPF and its Applicability
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, provides the framework under which the Employees’ Provident Fund operates as a retirement and savings program of the government. The Employees’ Provident Fund Organisation is an organisation that manages this fund solely to provide employees with financial security during hard times and in their post-retirement years. Although the law requires registration for some employers with EPFO, others may register themselves under specific circumstances. In addition, all the step-by-step processes regarding the EPF registration procedure are also included here. Documents to be collected before initiation of the registration process:
(i) Company Detail: PAN Card of the Company.
(ii) Incorporation documents, partnership deed, or registration certificate as applicable, along with acts relating to it, including the Shops and Establishments Act.
(iii) Address proof: utility bills or lease.
(iv) Employer’s details: phone number, Aadhaar number, and employer PAN.
(v) Employee Details:
(vi) List of employees with salary details.
(vii) Bank accounts for all employees.
(viii) Designation and joining date for each employee.
EPF registration is entirely done online on the EPFO official website. The steps are as follows:
- Open EPFO Portal – Visit the official EPFO website at www.epfindia.gov.in. Click on the Establishment Registration tab.
- Obtain Login ID at Shram Suvidha Portal – Register on the Shram Suvidha Portal of the Ministry of Labour & Employment for login to generate an ID. Such information includes the name of the employer, the name of the organisation, and the email address details needed to create the ID.
- Registration in the Form – Open EPFO portal credentials created using this. Form 5A (Employer Registration Form) should be completed with all necessary details, such as the name and address of the establishment. Date of establishment of business and type of activity being carried out. Details about sole proprietors, partners, or directors.
- Submission of Required Documents – Upload scanned copies of required documents, such as incorporation registration or certificate. Include the PAN and proof of address for the establishment. Provide details of the business bank account.
- Verification and Submission – Scrutiny of the application will be conducted by EPFO after it is submitted. The officials of EPFO will scrutinise the application and may demand any additional information or documents if needed.
- EPF Code Number Issuance – This EPF Code number will be unique, as the employer plans to use fifteen digits for all its communications with EPFO. EPFO will issue this code upon successful verification of the employer profile.
Once registered, they are required to save 12 percent of their employees’ basic salary and contribute an approximate amount every month to their EPF account. The return and contribution from EPF must be submitted monthly on the EPFO portal. Another important thing is maintaining personnel records with their respective UANs.
Benefits of ESI / EPF Registration
The Employees’ State Insurance (ESI) scheme is designed to provide workers with comprehensive social security. It covers medical expenses that the insured himself incurs or which his dependents incur in connection with maternity and compensation for incapacity due to disability and for leave due to sickness. Furthermore, it also provides provisions against work-related injuries and aids during unemployment, as in the case of the Rajiv Gandhi Shramik Kalyan Yojana. This type of security support, particularly during critical periods, along with excellent healthcare and financial benefits, helps employees in their overall welfare and performance.
To ensure sound economic assistance to employees, the government generates funds through internal collections from employees. Employers and employees also pay twelve percent each from their basic salary into the fund; the fund has the advantage of earning interest year by year. EPF has made it possible to take withdrawals, other than pensionable amounts, for specified purposes prior to retirement or to meet sudden demands towards education, marriage, medical emergencies, or to purchase an annuity as approved. Additionally, insurance is provided under the EDLI (Employee Deposit Linked Insurance) scheme for the benefit of the employee’s family in the event of premature death.
In total, ESI and EPF together offer long-term security and enhance employee morale.
Conclusion
Registration under ESI and EPF provides safety in terms of financial security for health services and retirement fund provision for the said employees. Moreover, it demonstrates the employer’s concern regarding the welfare of these employees. Such organisations, more than anything, create a work-friendly atmosphere for employees and, consequently, become an integral part of the edifice that solidifies the country’s social security structures.
