ESI often confuses individuals. As it is one of the complex terms which is abided by rules and regulations imposed by the legislature which are complex. Having said that, it is essential to know the rules and benefits of these schemes as it provides security to the employees.  ESI scheme is an Act in the legislation that aims in protecting the employee from destitution or deprivation in the hour of crisis.  ESI is one such scheme which aims in providing social security to anyone employed in a few industries. To gain a better insight let’s delve into a few commonly surfed question on google such as:

  • What is the ESI scheme ?
  • The history of ESI or employee state insurance 
  • Where is the ESI implemented and who are the employees covered under this act?
  • What are the documents required for ESI registration ?

Let’s begin with these simple questions to gain a better understanding:


What is the ESI scheme ?

Employee state insurance scheme is a financial self servicing insurance scheme introduced by the state and federal government for employees in India. ESI scheme is majorly focused to protect the employees by providing medical insurance. It additionally covers disablement of loss of wages faced by the employee due to various reasons. 

The esi scheme provides financial assistance for the family of the employee who has faced any unfortunate disease or accident. It is one of the key components of compliance along with provident fund and tax. 


The history of ESI or employee state insurance 

The employee state insurance scheme was implemented by the then ruling government in the year 1948. It is known as the Employee state Insurance Act, 1948. It was the very first vital act in the legislation for social security of the employees post independence. 

The ESI act aimed at providing medical assistance to the employees working for organizations such as road transports, educational and medical institutions, newspapers, etc or any organization that had more than 10 employees.

The esi scheme sheltered the needs of both the employee and his/her families. In case if the employee meets an unfortunate accident which results in death or disablement, the ESI scheme provides pension amount to the dependent of the employee. 


Where is the ESI implemented and who are the employees covered under this act?

The ESI scheme is implemented all over the country. Any industry or business that qualifies for the Factories Act or shop and establishments Act, where the total number of employees is more than 10 is eligible and are covered under the ESI scheme.

It obligates the employer to cover the employees working for him/her, and are within the threshold limits. For instance, employees who receive a salary below or equal to 21,000 per month, qualify as representatives to be covered under the ESI. The amount can easily be calculated on an ESI calculator online.


What are the documents required for ESI registration ?

Organizations are required to register under the ESI scheme. The documents required to register for the scheme are:

  • A registration certificate obtained from either one of the following

The Factories Act

Shops and Establishment Act

  • Certificate of registration in case if its a company or partnership deed in case if its a partnership.
  • Memorandum and article of association of the company
  • List of the employees associated with the organization.
  • An authorized identification ( PAN card) of the business entity
  • Identification ( PAN card ) of the employees working in the organization
  • The details of the compensation paid by the employer
  • A detailed list of the designated directors of the organization
  • The shareholders of the organization
  • Attendance data of the employees of the organization

Once the employer has the above mentioned documents the he/she can register following the procedure mentioned by the ESI .

Form no-1 (Employee registration form ) can be downloaded and filled to apply for the registration. 

The above mentioned questions are just a glimpse to get a brief hold of the meaning of ESI.