EMPLOYEES STATE INSURANCE (ESI)
REGISTRATION OF FACTORY/ESTABLISHMENT
Registration of a factory/establishment with the Employees’ State Insurance Corporation is a statutory responsibility of the employer under Section 2-A of the Act read with Regulation 10-B. The employer, in respect of a factory/establishment to which the Act applies for the first time, is liable to furnish Declaration of Registration in Form 01 (Employers’ Registration Form) to the concerned Regional / Sub Regional Office within 15 days after the Act becomes applicable.
This is obligatory on the part of the Employer. In addition to this, the employer will have to indicate, in a separate sheet, the name and address of the factory/establishment, number of employees, nature of duty and name, designation and address of the Manager, controlling such persons in respect of any other office(s) situated outside the premises of the Factory/ Establishment.
COVERAGE UNDER THE ESI ACT, 1948
The Act was originally applicable to non-seasonal factories using power and employing 20 or more persons; but it is now applicable to non-seasonal power using factories employing 10 or more persons and non-power using factories employing 20 or more persons.
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons.
The existing wage-limit for coverage under the Act, is Rs.10,000/- per month (with effect from 1.10.2006).
The ESI Scheme is being implemented area-wise by stages. The Scheme has already been implemented in different areas in the following States/Union Territories
All the States except Nagaland, Manipur, Tripura, Sikkim, Arunachal Pradesh and Mizoram.
PROCEDURE FOR REGISTRATION OF FACTORIES:
Ascertain whether your factory / establishment is situated within the area of implementation by ESIC (Implemented area). Regional Office, Sub Regional Office, Branch Offices, and Inspectorates Office of ESIC will guide you, on this matter, if contacted.
It is statutory responsibility of the employer to get his factory/establishment registered under the ESI as per Section 2A of the Act, read with Regulation 10 B within 15 days of establishing or 15 days after the Act becomes applicable to the area in which the factory is situated. A declaration of registration in Form 01 (Employer’s Registration form) is to be submitted to the appropriate office (Regional Office, ESI Corporation,Chennai in your case) for the purpose.
The Sub Regional Office will allot a specific code number in Form C-11, after examining the aspect of coverage. This number so allotted is very specific for the employer and the same has to be used in all correspondence with ESIC. The area Branch Office to which the particular employer attached is the “Appropriate Office” for “Registration of Employees”. List of Branch Offices and Dispensaries under the Coimbatore Sub Region is furnished in a separate Booklet.
Sub Code Number
There may be a case where the employer is having the main factory / establishment at one station and sub-unit, branch office, sales office or registered office at another station, either within the State or outside the State; In all such cases, on request of the employer to the Regional Office / Sub Regional Office concerned, Sub-Code number is allotted to each sub-unit, branch office, sales office and registered office.
For registration of employees coverable under the Scheme, the Employer shall submit Employees Declaration Form (Form 1) in respect of every individual employee separately.
PROCEDURE FOR REGISTERING EMPLOYEES:
The monthly wage limit for coverage would be such as prescribed by the Central Govt. vide Rule 50 of ESI (Central) Rules 1950. The existing wage ceiling is Rs.10000/- p.m. (with effect from 1.10.2006). All those persons employed for wages drawing an amount within the wage ceiling employed in clerical, manual, skilled, semi-skilled, unskilled without distinguishing casual, temporary, technical & non-technical are to be covered. In respect of each of such employees a declaration (Form 1), duly filled in & signed by the employee concerned and duly countersigned by the authorized signatory of the employer is to be forwarded to the appropriate Branch Office within 10 days of employment along with two copies of family photo.
Appropriate Branch Office shall allot Insurance Numbers, which are specific in favour of the individual employee, (Male & Female employees will get separate series of Insurance Numbers) and forward to the employer, along with the Identity Card / Temporary Identity Card, Return of declaration forms etc. At the same time the office will also forward the Medical Record envelops of such Insured Persons to the respective dispensaries.
Distribute the Identity cards to individual, employees under due acknowledgement. It should be ensured that each employee signs on the card in the presence of the employer before issue of the card. Educate the employee on the benefits available under the Act & how to claim the Medical Benefits and cash benefits whenever required.
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.70/- 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.
RETURN OF CONTRIBUTION:
The RCs should be prepared in quadruplicate and submitted to the appropriate Branch Office within 42 days of the expiry of the contribution period (12th May or November 11th of each year).
Return of contribution is required to be submitted separately for the main Code Number and each sub-code number. It is in the interest of the employer to make compliance in respect of the sub-unit, branch office, sales office, registered office etc. independent of the compliance being made in respect of the main unit.
Where the employer prefers to make compliance from the parent unit, he may submit only one return in respect of all the branches. The single return in such cases will be accepted at the concerned Branch Office to which the parent unit is attached. Such employers are also advised to ensure that names of Branch Offices to which the Return pertains should be distinctly noted in the return so as to facilitate their expeditious onward transmission to those Branch Offices and also to avoid undue inconvenience to their Insured Persons.
Such employers also may submit return of contributions in respect of each branch office/sales office separately alongwith copies of remittance challans in support of payment of contributions in respect of the employees of each branch office to the parent Branch Office.
On the other hand, where the employer prefers to make compliance through their Branch Offices/ Sales Offices separately in the Regions where such offices etc. are located, the RC may be submitted by the Branch office to the concerned Branch Offices and there will be no difficulty in subsequent receipt of benefits.
Branch Office while acknowledging the RC for the half year will return one copy of RCs to the employer. Place this RC in ESI file of the employer & produce the same before the Inspecting Officer/ Insurance Inspector who comes for Inspection, which is a statutory one.
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.