Key Compliance Requirements Under the ESIC Act for Employers
The Employees’ State Insurance (ESI) Act, 1948, is one of the most crucial labor laws in India, ensuring medical, financial, and social security for employees in case of sickness, maternity, disability, or employment-related injuries. Employers covered under the ESIC Act must adhere to strict compliance requirements to avoid penalties and legal complications.
This blog provides an in-depth guide to the key compliance requirements under the ESIC Act for employers, ensuring smooth implementation and adherence to the law.
Registration Under ESIC
Employers must register their establishment under the ESIC Act if they meet the eligibility criteria. The registration process involves:
- Visiting the ESIC online portal (www.esic.in)
- Signing up for an Employer Code Number
- Submitting business details, employee information, and relevant documents
- Ensuring registration is completed within 15 days of reaching the eligibility threshold
Failure to register within the stipulated time can result in penalties.
Employee Coverage and Contribution
Employers must ensure that all eligible employees are covered under ESIC. The eligibility criteria include:
- Employees earning a gross salary of up to Rs. 21,000 per month (Rs. 25,000 for persons with disabilities)
Contribution Rates (As of Latest Update)
- Employer’s Contribution: 3.25% of the employee’s gross wages
- Employee’s Contribution: 0.75% of the gross wages
Employers must deduct employee contributions and deposit the total ESIC contributions on time.
Timely Payment of ESIC Contributions
Employers are required to deposit ESIC contributions on or before the 15th of every month. The steps include:
- Generating an ESIC challan online
- Making payment through net banking, or designated banks
- Ensuring timely submission to avoid interest and penalties
Late payments attract 12% interest per annum on the due amount.
Maintenance of Records and Registers
Employers must maintain accurate records of employee details, wages, and ESIC contributions. Some key records include:
- Employee register with ESI numbers
- Salary and wages register for contribution calculations
- Inspection book for ESIC officials
- Accident registers to document workplace injuries
These records must be readily available during inspections.
Filing of ESI Returns
Employers are required to file ESIC returns twice a year:
- April – September (to be filed by 11th November)
- October – March (to be filed by 11th May)
The return filing includes details of:
- Employee contributions and wages
- Any changes in employee status (new joinees/resigned employees)
- Accidents, sickness, or maternity benefits availed
Failure to file returns on time may lead to penalties and legal action.
Facilitating Employee Benefits
Employers must educate and assist employees in availing benefits under the ESIC scheme, such as:
- Issuing ESI Pehchan Cards to employees
- Informing employees about medical, sickness, maternity, and disability benefits
- Helping employees and their families access ESIC hospitals and dispensaries
- Assisting in the claim process for sickness, maternity, or accident benefits
Reporting Workplace Accidents
In case of a workplace injury or fatal accident, employers must:
- Report the accident to ESIC within 24 hours
- Fill and submit Form-16 for accident reports
- Ensure the injured employee receives medical treatment at ESIC dispensaries
- Assist dependents in claiming benefits in case of death due to employment injury
Compliance with ESIC Inspections
ESIC officials conduct periodic inspections to verify compliance. Employers should:
- Cooperate with inspectors and provide all necessary records
- Ensure contributions, registers, and return filings are up to date
- Implement any corrective measures suggested by inspectors
Penalties for Non-Compliance
Non-compliance with ESIC regulations can result in severe penalties, including:
- Failure to register: Fine of Rs. 10,000
- Non-payment or late payment of contributions: 12% annual interest on dues
- Failure to file returns: Legal action and financial penalties
- Providing false information: Imprisonment of up to 2 years and fines up to Rs. 5,000
Recent Updates & Amendments in ESIC
Employers must stay updated on ESIC rule changes, including:
- Increased wage ceiling from Rs. 15,000 to Rs. 21,000
- Online filing and digital records for compliance ease
Conclusion
Ensuring ESIC compliance is crucial for avoiding legal risks and ensuring social security for employees. Employers must register on time, make monthly contributions, maintain records, file returns, and assist employees in availing benefits.
For expert assistance in ESIC compliance, audits, and labor law advisory, formerly Exertion HR Solutions Pvt. Ltd. today!
Need help with ESIC compliance? Get in touch with our experts today!
📧 Need assistance? Reach out to Exertion HR Solutions Pvt. Ltd. and
let’s make your workplace compliant and trusted!
Stay ahead with the latest updates! 🌟 Follow us on our WhatsApp channel for early updates and insights. Don’t miss out!
For more information, visit our website: Service – EXERTION HR SOLUTIONS PVT. LTD.
Read More of Our Blogs: Blogs
Read more about our untold stories at Untold Stories
Subscribe to our YouTube channel: Exertion HR Solutions Pvt Ltd – YouTube
