information for employers

Reliefs

  • Employers are absolved of all their liabilities of providing medical facilities to employees and their dependants in kind or in the form of fixed cash allowance, reimbursement of actual expenses, lump sum grant or opting for any other medical insurance policy of limited scope unless it is a contractual obligation of the employer.
  • Employers are exempted from the applicability of the Maternity benefit Act, Workmens' Compensation Act in respect of employees covered under the ESI Scheme
  • Employers have at their disposal, a productive, well secured workforce,; an essential ingredient for better productivity.
  • Employers are absolved of any responsibility in times of physical distress of workers such as sickness, employment injury or physical disablement resulting in loss of wages as the responsibility of paying cash benefits shifts to the Corporation in respect of insured employees.
  • Any sum paid by way of contribution under the ESI Act is deducted in computing 'Income' under the Income Tax Act.

Duties

Obligations of the Employers under the ESI Act and Rules and Regulations made there under are summarized as under

  • Get your factory/establishment registered within 15 days after the Act becomes applicable. Apply online to the Regional Office/Sub-Regional Office(RO/SRO) of the ESIC for this Purpose. Obtain Employer's Code Number for use in all ESIC Forms/documents and also for correspondence with various offices of the ESIC.
  • Employers are advised to apply for coverage only through the ESIC web portal- www.esic.in.
  • In case of Labour/Manpower supplying agencies, challan of advance contribution should be generated by the employers through the ESIC web portal.
  • Pending receipt of Permanent bio metric identity cards/Pehchan card you may download 'temporary Identity certificate' for the covered employee (s) enabling them to avail cash/medical benefits.
  • Pay ESI contributions (Employers' share @ 4.75% of the wages and the employees' share @ 1.75% of the wages) within 21 days of the month following, in which the wages fall due.
  • The employee Insurance Number, once given, is valid for the lifetime of an employee. He need not register himself again if he changes location or employment. The Insurance Number is a unique number, valid throughout the country.
  • Employer must ensure that the employee does not have any previous insurance number before registering him as a new Insured Person. This is for the benefit of the employee.
  • In case the employee has already contributed in a particular Insurance Number, the same number should becontinued.
  • Use of same Insurance Number will help to safeguard the medical history of the Insured Person of reference and referral.
  • The employers themselves have been authorized to upload personal particulars of employees, inculding family members of such employees. Hence, change of name cannot be executed.
  • Deletion of contribution once uploaded and challan once generated are not allowed.
  • Transfer of contribution can be done to the Insurance Number which has a Pehchan Card enrollment. Such transfers would be done only if both IP names are same and mapped to the same employer.
  • Please ensure that all employees have completed bio metric enrollment for issue of Pehchan Card.
  • Employers should upload/update their particulars viz e-mail ID, Mobile Number & PIN Code of the area to the ESIC web portal 'www.esic.in'.
  • Maintain an 'Accident Book' as prescribed under the Factory Act/ESI Act.
  • Submit an "Accident Report" to the Branch Office/ESI Dispensary concerned immediately in respect of accidents that could result in death or disablement and within 24 hours of its occurrence otherwise. Minor accidents which do not cause absence from work need not be reported.
  • Grant leave to insured employees on the basis of sickness certificates issued by any authorized ESI doctor.
  • Maintain the important records/registers properly for purpose of inspection: Click here to know the records/registers to be kept for inspection.
  • Furnish any requisite information promptly as and when asked for by the Regional Office/Branch Office/any other office of the Corporation/Scheme.
  • Facilitate proper inspection of factory/establishment by any authorized officer of the Corporation and produce before him all relevant records on demand.
  • Intimate the date of closure or shifting (temporary or permanent) of the factory/establishment to the Regional Office/Branch Office within seven days of its closure or shifting.
  • Promptly report any change in the business activity, ownership of the concern or its management.
  • Ascertain the liability towards ESI dues, while taking over the ownership of any factory/establishment by purchase, gift, lease or licence or in any other manner whatsoever as new owner is liable to discharge the past liabilities if any.
  • Maintain proper sanitation for a hygienic and healthy environment within the workplace and in residential quarters if allotted to the insured persons.

Contributions

Contribution is the amount payable to the Corporation by the Principal Employer in respect of an employee and comprises the amount payable by the employee and the employer.

It is obligatory on the part of the employer to calculate and remit ESI Contribution comprising of employers' share 4.75% plus employees' share of 1.75% which is payable on or before 21st of the following month, to the month to which the salary relates. If the employee is drawing upto Rs.100/- as daily average wage, he is exempt from the payment of his share of contribution. The employer is however to pay employer's share of 4.75% of the salary received/receivable by the employee.

Recovery of contribution

In the first instance the Principal Employer is to pay employers' share of contribution in respect of every employee whether employed directly or through immediate employer. The employees' share may thereafter, be recovered by making deduction from their wages for the wage period for which contribution is, however is payable. No such deduction may be made from any wages other than those relating to the period in respect in which contribution is payable.

Wages

'Wages' has been defined as:

  • All remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, was fulfilled.
  • And includes any payment to an employee in respect of any period of authorised leave, lockout, strike which is not illegal or lay off.
  • And other additional remuneration, if any, paid at intervals not exceeding two months.

But does not include

  • Any contribution paid by the employer to any pension fund or provident fund, or under ESI Act.
  • Any travelling allowance or the value of any travelling concession.
  • Any sum paid to the person employed to defray special expenses entitled to him by the nature of his employment or
  • Any gratuity payable on discharge.

Inspections

In order to ensure proper compliance of the provision of the ESI Act, 1948, inspection of factories and establishments has become one of the most important responsibility of the ESI Corporation. Under the enabling provisions of the ESI Act, employers are expected to fully co-operate with inspecting authorities, i.e. Insurance Inspector or any other authorised officer(s) of the Corporation appointed under Section 45 of the Act or any other officers of the Corporation as mentioned under Regulation 102 of the ESI General Regulations. Employers will facilitate Inspecting Officers the lawful discharge of their duties and provide full co-operation in collection of all essential information related to coverage, payment of contributions, maintenance of ESI records etc.

The ESI Inspector or any other authorised officer normally sends advance intimation regarding the inspection of records of a factory or an establishment in his area of operation. On such occasions, the essential records and documents are to be kept ready for inspection and produced on demand before the inspecting authority.

If any labour is engaged either directly or through contractor for carrying out the construction work/ repair and maintenance of the premises/ machinery etc. within the covered premises, the record thereof is also required to be produced before the Inspector as contributions are payable on the labour component. The responsibility for payment of contributions rests with the Principal Employer.

Inspections records to be produced

  • Attendance Registers(s)/Muster Roll(s) in respect of all employees including those employed through contractors
  • Wages register
  • Cash Book /Bank Book
  • Accounts Books including Ledgers with profit and loss account, balance sheet, bills & vouchers.
  • Employees' Register (Form 7)
  • Accident Book
  • Returns of contribution (Form 6)
  • Returns of declaration forms (Form 3)
  • Copies of challan
  • Inspection book

Recovery

Recovery Officer, appointed under Section 45(I)(b) of the ESI Act has been empowered to recover ESI Contribution, Interest and Damages determined under the provisions of Section 45(A), Regulation 31A, under Section 85(B)(I) and Regulation 31C of the ESI Act. Such Recoveries are made under the provisions of Section 45(C) to 45(I) of the Act, provisions contained in second and third schedule to the Income Tax Act, 1961(43 of 1961) and Income Tax (Certificate Proceedings) Rule 1962 as amended from time to time, with necessary modifications/substitutions of certain words referred as arrears.

For effecting such recoveries, the Recovery Officer issues Notice of demand in Form CP-2 allowing 15 days time to make compliance thereof. In the event of failure to comply with such Notice, the Recovery Officer follows one or more of the following modes of recovery:

  • Attachment and sale of the movable and immovable property of the factory or establishment/Principal/immediate Employer.
  • Arrest of the Employer and his detention in prison.
  • Appointing a receiver for the management of the movable and immovable property of the factory or establishment/ Principal/ immediate employer.
  • In case of bouncing of cheques, prosecution against defaulting employers are filed U/s 138 (b) of Negotiable Instrument Act, after allowing 15 days time to defaulting employer to make payment against bounced cheques.

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