A factory is defined as any establishment where ten or more individuals are employed, or have been employed for wages, on any day within the past twelve months. It includes any area where manufacturing processes are undertaken, whether with or without the assistance of power. If a factory premises contain multiple departments engaged in activities related to the manufacturing process, these departments are considered distinct from the factory itself. According to the ESI, a factory encompasses a seasonal operation lasting no longer than seven months annually. During this period, the factory engages in activities such as blending, packing, or repacking of tea, coffee, or other manufacturing processes specified by the central government. Mines are excluded from this definition, as per the provisions of the Mines Act, 1952, or a railway running shed. Therefore, if there are ten or more individuals working within the factory premises, it qualifies as a factory regardless of whether they receive wages. Additionally, not all individuals working in the factory need to be engaged in the manufacturing process. According to the ESI Act, an establishment refers to an organized group of individuals or an institution. It doesn’t have to be confined to a specific location. If an establishment employs 20 or more individuals, it must obtain ESI registration in India. Therefore, establishments with fewer than 20 employees earning less than Rs. 21,000 per month as wages are not required to register for ESI.
For obtaining ESI registration in India here is the list of documents that is to be submitted by the employer along with the application:
1.Registration Certificate of the Shops and Establishment Acts.
2.Factories Act
3.Address proof of Principal place of business
4.Copy of PAN Card
5.Bank statement (Latest)
6.Memorandum and Articles of Association or the partnership deed or trust deed depending on the nature of the entity.
7.Certificate of Commencement registration no
The monthly pay sheet is also required for computing the contribution amount for each employee for ESI filings.
Registered ESI members and their families receive comprehensive medical care and insurance from the first day of employment Retired and permanently disabled members, along with their spouses, can also access medical care by paying an annual premium of Rs 120.
Pregnant women are entitled to maternity benefits for up to twenty-six weeks This leave period can be extended by an additional 30 days upon medical advice, with full wages, provided the woman has contributed for 70 days in the preceding year.
Employees receive 90% of their wage on the first day of disability, regardless of their contribution status The permanent disablement benefit is paid monthly at 90% of the wage.
Employees can be absent from work due to illness for a maximum of 91 days per year, receiving 70% of their monthly wages during this period.
In the event of an employee’s sudden demise during employment, their dependents receive 90% of the employee’s monthly salary.
The family members of deceased employees are eligible for an additional Rs 10,000 for funeral expenses.
Confinement expenses are provided for insured women or wives of employees in cases where medical facilities are not available under the ESI scheme.
The ESI scheme is an extensive social security program aimed at providing protection to employees in the organized sector against sickness, maternity, disability, and death resulting from employment-related injuries.
The existing wage limit for coverage under the ESI Act is Rs. 21,000 per month w.e.f from 1.01.2017.
ESI contributions are calculated on a gross salary of Rs. 21,000. If the salary exceeds Rs. 21,000, the ESI contribution remains constant.
The ESIC scheme does not cover the workers or the employees that earn more than Rs.21,000 per month and in the case of a person with disabilities, the maximum wage is Rs. 25,000
The employee insured person and the family are entitled to avail medical benefits from the very first day of his or her joining the insurable employment.
Yes, it is the legal obligation of the employer under Section 2A of the Act, along with Regulation 10-B, to register their Factory/ Establishment under the ESI Act within 15 days from the date it becomes applicable to them.
The ESI act 1948 is an establishment that has more than ten employees in the organization and has a maximum salary of Rs.21,000 per month should mandatorily apply for the ESI registration under the ESI Act within 15 days.
