ESIC Registration Process & Records to be Maintained under ESIC & PF

ESI Registration process and Registers and Records to be maintained under ESIC & PF

ESIC registration process

Employees State Insurance Act, 1948 was formulated so as to protect interests of workers and employees working in India. The act being based upon social insurance scheme grants funds to employees in case of injury, sickness, maternity, any temporary and permanent Disablement and death caused due to employment injury. The statutory requirements have made it compulsory about Employers to register themselves and their employees under the scheme. ESIC registration process is a thorough method, and one needs to follow each and every step of it so as to avail the benefits.

 Moreover, complete records for the same are demanded by the act. For insuring themselves under this compulsory scheme initiated by Employees State Insurance Corporation, it becomes vital to be acquainted with the requirements and records an employer needs to maintain.

 Provident Fund is yet another crucial contribution bought into force by The Employees Provident Fund and Miscellaneous Provisions Act 1952. Both of them are remarked as mandatory requirements under the regulations of a concerned act. Under ESIC, primarily the employer should opt for ESIC Registration, and afterward, every employee must be registered by the employer.

Initiation of ESIC Registration Process

  • As an Employer, one should examine that whether its unit comes under the area regulated by the Act. If the unit is situated within the boundaries of implemented area, one can proceed.
  • An employer needs to register himself by the filling the form 01, by downloading it from the official site of ESIC. In the case of Employee Provident Fund Form 5A and 9 are applicable for the same. By submitting necessary documents, one can wait for the Registration code. The government provides this code within three days. Relevant information needs to be provided by the employer to the concerned Employee provident fund organization.
  • Under ESIC, once the application process is completed, an employer receives the government posts an intimation letter containing the code number.
  • The next step is to register every individual employee, the employer needs to submit a declaration, and all the relevant information must be communicated to the employees. The local offices provide temporary cards eligible for three months, and after the completion of the period, they are supplied with permanent cards.
  • Under the employee provident fund scheme, there is no need to register every single employee. However, to avail the medical benefits provided by ESIC, every employee must be registered.
  • Another distinction lies in the fact that under ESIC, the contributions made by employers calculated on the amount of total wages paid to all the employees working at a specified time is more than the percentage of wages that are deducted from the salaries of employees. Whereas under the Employee Provident Fund Scheme the contribution made by the employer and the employee are the same. 

Records to be maintained

Once registered under the ESIC Act, an employer is required to pay the ESI contributions before 21st of the following month. Moreover at an interval of six months, Half yearly returns to be sent to the concerned branch office under Form 5. Under both the acts, one needs to maintain all the following records for facilitating a smooth inspection:

  • Attendance and wages registers of employees need to be managed by the employer. These registers must contain all the information since an employee has been attending the organization. It is the prime duty of an employer to present reliable data so as to avoid any window dressing that can lead to legal consequences.
  • The employer must maintain form 6 register. This form depicts all the data relating to the payment of contribution by the Employer. It is one of the inevitable records under the act.
  • Inspection books need to be maintained so as to have complete information regarding inspection review of an organisation by the concerned experts.
  • An Accident register is a crucial record, as the amount an employee is entitled to under the scheme is the function of accidents that the concerned employee has encountered.
  • Moreover, Files containing all the monthly Challans and returns need to be maintained.
  • An employer needs to possess a complete record of all the relevant accounts, books and statement. Profit and loss account, Cash book, Balance sheets and its annexures, all the bill vouchers.

Registration requirements checklist under ESIC

For benefitting from the advantageous medical schemes provided by the government, a thorough ESIC Registration process is to be followed by an employer. All such documents must be taken care of before facilitating Registration.

  • Copy of bank statements
  • Cancelled cheques
  • Integrated list regarding employees
  • Pan card copy of owners, firms or any organisation
  • Monthly list regarding the number of employees in the concerned organisation
  • Proof of Registration of establishment
  • Residence proof
  • List of clients
  • Copy of work orders
  • Copy of Attendance and wage sheets
  • If earlier applied, date od application must be mentioned
  • Memorandum of Association and Articles of Association.

 Conclusion

Employee Provident fund scheme and Employee State insurance scheme are aimed at providing due assistance to employees for medical, educational and other allowances. In both the schemes funds are raised by the contributions of both employer and employee. A systematic ESIC PF Registration procedure is to be completed. Under ESIC, employers contribute 4.75% while the employees contribute 1.75% from the compensation they are entitled to. Under EPF, an equitable contribution of 12% is made by both the employees and employers. Every employee receiving a salary of RS. 21000 or above are required to be a part of the same. So as to facilitate a smooth ESIC registration process, it is mandatory to keep all the records and registers maintained in the most appropriate manner.

Author: Anil Agrawal
EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.