ESI – Is It the Employer’s Responsibility?

Employment State Insurance

Looking over whether ESI registration is an employer’s Responsibility? Then here it comes: Yes, it is the responsibility of the employer to register their Establishment under the ESI Act within 15 days of its applicability. 


The Government of India entrusted Prof.B.P.Adarkar in 1943 to submit a report on the health scheme for the industrial workers. Based on this report The Employment State Insurance (ESI) Act of 1948 was enacted. The Employees’ State Insurance Act, 1948 promotes the idea of the need of social insurance scheme which will protect the interest of workers in contingencies such as temporary or permanent physical disablement, sickness, maternity, death due to employment injury resulting in loss of wages or earning capacity. The Act also ensures reasonably good medical care to workers and their immediate dependents. ESIC also provides a monthly cash allowance for a duration of maximum 24 months in case of involuntary loss of employment or permanent invalidity due to non employment injury. The act was intended for factory workers but later it became applicable to all entities having 10 or more workers.


Under Sec 2A of the Act, It is the employer’s Responsibility to register their Establishment  under the ESI Act within 15 days of its applicability to them. All the establishments having 10 or more persons employed are mandatorily required to register under the ESI Act, 1948. Such employers should get themselves registered within 15 days from the date ESI Scheme becomes applicable to them.

All employers registered under the MCA portal are automatically covered under ESIC. Users can make it dormant by logging into the system in case you are not immediately coverable under ESI Act to avoid defaulter action. Once a factory or establishment comes under the purview of the ESI Act, it continues to be covered under the ESI act  irrespective of the fact that the number of employees, entitled to be covered under the ESI act, employed by such establishment falls below the prescribed limit at any time or there is a change in the manufacturing activity of such establishment.

Wage Limit

The employees, whose salary does not exceed Rs. 21,000, are entitled to be under the ESI Act, 1948. The employees should continue to make contributions to the ESI scheme till the end of the contribution period, even if their salary exceeds the wage limit of Rs. 21,000.

Contribution Period    

The contribution period under the ESIC is made twice a year. That is first, during 1st April and 30th September with a corresponding cash benefit period 1st January of the following year to 30th June. Secondly during 1st October and 31st March with corresponding cash benefit period  1st July of the following year to 31st December.

Contribution Rate

The contributions depend on the employees’ earning capacity as a fixed proportion of their salary. The social security benefits are awarded without discrimination. Employees have to contribute 0.75% of Gross salary on a monthly basis and employers have to contribute 3.25% of the same. 

Documents Required for Registration

Sole Proprietorship

The requirements for the registration of sole proprietorship under ESIC are  License of establishment,  Aadhar, PAN or Any other ID proof of proprietor, Photograph of the proprietor,, Valid Mobile Number & Email ID,  Utility Bill, Bank Account Details and Rent Agreement, If applicable.


The requirements for the registration of partnership under ESIC are·Partnership Deed,      PAN of Firm If applicable,  Aadhar, PAN & Any other ID Proof of Partners,  Photo,  Utility Bill, Bank Account Details and Rent Agreement If applicable


The requirements for the registration of partnership under ESIC are   Certificate Of Incorporation of the company,  Memorandum of Association & Article of Association,·      PAN of Company,  Aadhar, PAN & any other ID proof of Directors, Photo of Directors,·  Bank Account Details and Rent Agreement If applicable 

ESI Benefits

 Section 46 of the ESI Act of 1948 stipulates that subscribers will receive six benefits. They are Medical benefits, Sickness benefits, Pregnancy benefits, Disability benefits, Dependents benefits and other benefits including Confinement Benefits and Funeral costs.

The ESI Corporation (ESIC), which oversees the provision of medical and cash benefits to employees and their families, manages this fund in accordance with the ESI Act of 1948. Employees who sign up for the program have the right to medical care for themselves and their dependents, cash unemployment benefits in certain situations, and maternity benefits for female employees. A disability benefit and a family pension are available in the event of employment-related death or disability. 

The introduction of Pehchan smart cards as part of Project Panchdeep has increased the role of information technology in ESI in recent years. Poor families who are eligible for the Rashtriya Swasthya Bima Yojana can use ESI hospitals and dispensaries in addition to having insured employees. In addition, ESI Corporation manages paramedical, medical, and nursing schools in a number of ESI hospitals across India.

Inorder to avail the benefits of ESI an employee must pay his contribution for a  minimum of 6 months in which 69 days of attendance in the previous 3 months is mandatory. Exemption is available in case of Accidents only, but 69 days of attendance is mandatory.