We would like to bring your attention to the ESIC Act, a Central Government legislation that binds entrepreneurs who employ a specified number of employees. From an employee’s perspective, it serves as a Social Security Act, providing a lump sum amount upon retirement and continued pension funds for the unorganized and private sectors.

Applicability:

• Mandatory for organizations with 9 or more employees.
• Mandatory for organizations with at least one foreign employee.
• Directors receiving a salary and contract manpower are included in the employee headcount.
• Voluntary registration is possible even with one or more employees.Registration

Registration:

• Online registration with accurate details and submission of required documents.
• Enroll employees on the day of registration with their Gross salary.
• Submission of Aadhar, PAN Card, Bank account and nominee details.

Computation of Liability :To provide a sample calculation, assuming a Gross salary of Rs. 20,000/

Option 1: Employee contribution of 0.75 on Gross Salary – Rs. 150/- (deductible from salary), and employer contribution of 3.25% on Gross – Rs. 650/- (payable by employer).

Option 2: When the Gross salary exceeds Rs. 21000/- ESIC is not applicable

Compliance:

• Monthly payment due on the 15th of each month; delayed payments attract interest and penalties.
• Online submission of returns with additions and deletions of employees.
• Enrollment of new employees every month.
• Submission of settlement forms for departed employees.

Troubleshooting:We understand that certain issues may arise, such as:

• Backdated coverage: It is crucial to be mindful of backdated coverage. In some cases, a company may have a perceived employee count of 8 and may not provide ESIC coverage. However, if there are additional contract employees, housekeeping staff, or salaried directors, the total employee count may exceed 9, necessitating mandatory coverage. The coverage will be effective from the date the required employee count is surpassed, resulting in backdated coverage.
• Foreign employees: Even if there is only one foreign employee, coverage applies.
• Damages for late payment.
• Notices, inspections, and assessments.

If you find these requirements overwhelming, we are here to assist you with comprehensive solutions. Please feel free to contact us for further information and support.