Are You Putting Your Business at Risk?

Here's Why Employers Can't Afford

In the fast-paced business world, every decision carries weight, shaping the trajectory of success
or failure. Amidst this dynamic landscape, ensuring compliance with regulatory requirements is
an important task that cannot be overlooked. One such crucial regulation that employers cannot
afford to overlook is registration under the Employee State Insurance (ESI) Act. Designed to
safeguard the welfare of employees, this act imposes mandatory registration for certain
establishments, ensuring access to essential benefits. Understanding the scope and applicability
of the ESI Act is not just prudent; it's a fundamental aspect of responsible business management.

Therefore, if you run a non-seasonal factory or establishment having more than 10 employees (in
some states it is 20 employees) who have a maximum basic salary of Rs. 21,000 per month then
you will be covered under the ESI Act. Once your business/establishement falls under the
coverage of the ESI Act, you will have to mandatorily register with the ESIC(Employee State
Insurance Corporation) within 15 days from the date of its applicability.

Failure to register your business under the act even after its applicability will incur a fine of Rs.
10,000 and, in case of non-payment or delayed payment of ESI contributions, the employer will
be punishable for the offences under Sec 406 and 409 of the Indian Penal Code(IPC). Moreover,
if the employer fails to pay the contributions within the given time, he will have to pay the
contributions with a simple interest of 12% p.a, and along with that the ESIC can also claim
damages up to 25% p.a of the contributions pending. Non payment or delayed payment of the
employer contributions will also attract an offence under section 85 of the ESI Act for which the
employer can be prosecuted before a court. So, in order to prevent these penal consequences and
financial disruptions follow the directions given below:

➔ Register your business/establishment under the ESI Act with the ESIC through the ESIC
portal
 ➔ Once your business/establishment is registered under the ESIC, you as the employer will
have to adhere to the ESI scheme, where you will have to contribute an amount of 3.25%
of the total monthly wage payable to the employee and the employee will contribute only
0.75% of his monthly wage every month.
➔ To facilitate this contribution, you as the employer will have to register all your
employees through the ESIC portal and then file the monthly contributions made to the
employees under their name. The employer should then deposit the total
contribution(both employer and employee) in any branch of the banks prescribed.
➔ After the registration under the ESIC, the employer has to file ESI Returns half-yearly.
The following documents are required for the filing of the returns:
● Register of attendance of the employees.
● Form 6 – Register.
● Register of wages.
● Register of any accidents which have happened on the premises of the business.
● Monthly returns and challans
➔ The establishment needs to comply with the following after registering under the ESIC:
● Maintaining the attendance register.
● Maintaining a complete register of wages for workers.
● Inspection book.
● Monthly return and challan within the 15th of the succeeding month.
● Maintaining a register that records any accidents that happened on the premises.

By ensuring compliance with the Employee State Insurance Act, you're not just safeguarding
your business but also avoiding potential penalties. Remember, ignorance is no excuse when it
comes to the law. However, there's a silver lining – exemptions are available, provided your
employees already receive benefits comparable or superior to those mandated by the Act. So,
ensure you're on the right side of the law and protect your business interests while taking care of
your employees' welfare.
 Employee’s Key to Security: How the ESI Act Protects Employees at Work!

In today's world, medical expenses weigh heavily on every household. From routine check-ups
to unforeseen emergencies, healthcare costs continue to rise and rise, often placing a significant
strain on the average employee's earnings. Moreover, the responsibility of providing for one's
family in times of need adds an additional layer of financial worry. For many, the idea of
grappling with these expenses alone can feel frightening, difficult and in some cases impossible.
However, amidst these challenges, there is a relief – the Employee State Insurance (ESI) Act.
This Act is designed to offer comprehensive coverage beyond just medical and disability
benefits. The ESI Act emerges as a lifeline, providing much-needed support and security for
employees and their families.

The Employee State Insurance (ESI) Act is a comprehensive Social Security legislation designed
to accomplish the task of socially protecting the 'employees' in the organised sector against the
events of sickness, maternity, disablement and death due to employment injury and to provide
medical care to the insured employees and their families. In order for an employee to be eligible
for the benefits under the ESI Act they will have to be an Insured employee. An employee
becomes insured by being registered online by their employer. This registration process creates a
record of the employee in the system and assigns them a Temporary Identification Certificate
(TIC). The TIC is essentially a temporary insurance card. If the employee's Aadhar number (a
unique identification number in India) is linked to the TIC, it becomes a permanent e-pehchan
card. This registration is necessary to identify the employee and receive benefits under the
insurance program. The benefits that are available under this scheme are:

➔ Medical Benefit: Medical Benefit means the medical attendance and treatment to the
insured persons covered and their families as and when needed. So when an employee is
faced with a medical emergency they are compensated with some amount by the
employer to cover the medical costs.
➔ Disablement Benefit: If an employee suffers from any temporary or permanent
disablement during the course of their employment, it will have a huge adverse effect on
the employee and his family. In order to support the employee during such difficult
 situations the employer will provide cash benefits for a period of time if the disability is
temporary. On the other hand, if the disablement is permanent cash benefits are provided
for life
➔ Sickness Benefit: Sickness benefit is basically where periodical payments based on the
wages of an employee, are made to the employee in cases where the employee is under
certified sickness, it can only be availed for a continuous period of 91 days.
➔ Maternity Benefit: An insured female employee can claim maternity benefits during the
period of her pregnancy. Under this benefit, pregnant women are given paid leave for up
to 26 weeks during the period of their pregnancy
➔ Dependants Benefit: In the event of an unfortunate situation where the employee dies
during the course of employment, the employer provides periodical payments to the
dependents of the employee.
➔ Other Benefits: There are also other benefits such as funeral expenses, confinement
expenses, rehabilitation allowance, conveyance allowance, etc

Understanding the benefits provided by the Employee State Insurance (ESI) Act is like having a
safety net for all the uncertainties and misfortunes that can take place in the life of an employee.
It shields employees from various contingencies, such as medical emergencies, disabilities,
maternity expenses, and even funeral costs. By knowing these benefits, employees secure their
well-being and financial stability for their families, offering a form of relief during unexpected
situations. Moreover, by mandating certain benefits for employees, the ESI Act fosters a culture
of welfare and fairness in the workplace, reinforcing the employer-employee relationship.
Overall, the ESI Act plays a crucial role in ensuring the welfare and security of employees,
making it an indispensable cornerstone of the modern workforce.