ESI Return Filing

Employees' State Insurance (ESI) Scheme

Employees' State Insurance (ESI) is a comprehensive social security program designed to offer financial protection and healthcare benefits to employees in the event of unexpected circumstances. Funded by contributions from both employers and employees, this scheme ensures that insured workers and their families have access to medical services, financial support during illness or maternity, compensation for workplace-related disabilities, and coverage for funeral and confinement expenses. Additionally, in the tragic instance of an employee's death resulting from a work-related injury or illness, ESI provides financial assistance to the bereaved family, reinforcing the system's role in safeguarding employees' socio-economic well-being.

Dsolve assists businesses with the process of ESI registration.

Who should Register for the ESI scheme?

The ESI scheme, overseen by the Employees' State Insurance Corporation (ESIC) and regulated by India's Ministry of Labour and Employment, requires contributions from both employers and employees, totaling 4% of an employee's monthly gross salary to the ESI fund. Businesses in India with a workforce of 10 or more are expected to proactively enrol with the ESIC within 15 days of becoming eligible.

Filing ESI Returns: An Overview

ESI Registered employers are required to submit ESI Returns every sixth month, providing critical information about the employees insured under the scheme, their salaries, and the contributions made by both the employer and the employees. These returns play a key role in verifying the accuracy of contributions to the ESI scheme and ensuring that insured employees are accessing the benefits they're entitled to. Understanding how to file ESIC returns is essential for businesses to ensure compliance with regulatory rules regarding employee welfare and healthcare contributions.

All employers registered under the ESI scheme must file these returns by the prescribed ESIC return due date. Any delay or failure to do so can result in penalties and legal action.

Filing ESI Returns offers several significant benefits for both employers and employees under the Employee State Insurance (ESI) scheme:

ESI Return Filing Deadlines

ESI Return Filing is a crucial aspect of Employer responsibilities under the Employees' State Insurance (ESI) Act. These returns are submitted to the Employees' State Insurance Corporation (ESIC) to track contributions made by both employers and employees.

Monthly Contributions and Due Dates

Employers are responsible for taking a portion of their employees' wages as ESI contributions. These contributions must be paid to the ESIC by the 15th of the next month. For example, the filing due date for the ESI monthly contribution for September 2024 is October 15, 2024. Even if there are no active employees, private limited companies and one-person companies should file a "nil return". This payment schedule is the same as the Provident Fund (PF) contribution system.

Annual and Half-Yearly Returns

• Annual Return: This return is filed by January 31st of each year. It details any changes in the employer's establishment or workforce that occurred during the previous year.
• Half-Yearly Contribution Returns: These returns are submitted within 42 days of the end of each contribution period.
• Contribution Period 1: It ends on September 30th, and the due date to file the returns is November 11th.
• Contribution Period 2: It ends on March 31st, and the last date to file the ESI returns is May 12th.

ESI Return Filing Due Dates

Return Type	Due Date
Monthly Contribution	15th of the following month
Annual Return	31st January of the following year
Half-yearly Contribution Returns	Within 42 days of the end of each contribution period: - Contribution Period 1 (Ends on 30th September): 11th November - Contribution Period 2 (Ends on 31st March): 12th May

Essential Documents for Filing ESI Returns

To ensure a smooth and compliant Employees' State Insurance return filing process, businesses must keep the following documents up-to-date and readily available:

• Attendance register
• Form 6
• Register of wages
• Accident register
• Cancelled cheque of the company
• Inspection book
• PAN card of the organisation
• Monthly challans and returns for ESI

Consequences of Non-Payment or Late Payment of Employees’ Contribution

Failing to deposit the ESI contributions deducted from employees' salaries is considered a serious violation, as these amounts are entrusted to employers by their employees. The employer is entrusted with the employee's contribution deducted from wages, emphasizing a significant responsibility to deposit this amount with ESI.

Failing to deposit or delaying the deposit of the employee's contribution constitutes a 'Criminal Breach of Trust,' punishable under IPC Sections 406 and 409, and is also an offence under ESI Act sections 85(b-g).

Any discrepancies such as non-payment, delayed payments, or incorrect reporting under the ESI Act can lead to penalties, including imprisonment for up to 2 years and fines up to Rs 5,000.

Consequences of Delayed Payment

If an employer does not make the required contributions within the specified timeframe, they will incur a simple interest charge of 12% annually for each day the payment is delayed.

Penalty Structure for Delayed or Unpaid ESI Contributions

For any non-payment or delays in making contributions, the Corporation has the authority to impose and collect damages according to the Regulations. These damages are set at rates proportionate to the duration of the delay, without exceeding the due contribution amount:

• Delay under 2 months: Damages at 5% per annum
• Delay between 2 to 4 months: Damages at 10% per annum
• Delay between 4 to 6 months: Damages at 15% per annum
• Delay over 6 months: Damages at 25% per annum

In cases of non-compliance, the employer may face legal action under Section 85(a) initially, with the possibility of harsher penalties for subsequent violations. The ESI scheme aims to promote workers' welfare, and it is the employer's responsibility to fulfil this objective.

Procedure to File ESI Returns for Employers

Learning how to file ESIC return involves a series of steps employers must follow to ensure compliance with the Employee State Insurance Corporation (ESIC) regulations. Here’s a simplified guide on how to file an ESI return:

• Registration on ESIC Portal: If not already registered, the employer must first register their establishment on the ESIC portal by obtaining an ESIC registration number.
• Login to ESIC Portal: Employers need to log in to the ESIC portal using their 17-digit employer code and password.
• Employee Enrolment: Before filing returns, ensure all eligible employees are registered on the portal and their details are updated, including family details for medical benefits.
• Download the Return Form: The 'Return of Contributions' form is available for download from the ESIC portal. This form will contain pre-filled information based on the monthly contributions made.
• Review Contribution Details: Employers should carefully review the contribution details in the form for each employee, including the total days worked and the amount of wages paid, to ensure accuracy.
• Correct Discrepancies if Any: If there are any discrepancies or missing details, correct them before proceeding. Ensure that all employee information and contribution details are accurate and complete.
• Submit the Return: After reviewing and ensuring all data is correct, submit the return on the ESIC portal. This process is entirely online, and no physical documents need to be submitted.
• Acknowledgment Receipt: Upon successful submission, an acknowledgment receipt will be generated. Employers should save and print this receipt for their records and future reference.
• Keep Records: Maintain a copy of the filed returns and acknowledgment receipts for your records and compliance audits.
• Regular Updates: Regularly update the ESIC portal with any changes in employee details, salary revisions, or additions and deletions of employees to keep the records up to date for the next return filing.

How Dsolve Supports ESI Return Filing

Dsolve offers comprehensive assistance in both obtaining ESI registration and managing the ESI return filing process for businesses. Here's how we streamline the process:

• Document Collection: An expert from Dsolve specializing in ESI will gather all necessary data and documents required for the ESI return preparation specific to your business needs.
• Return Preparation: Utilizing the collected documents and information, our ESI expert will meticulously prepare your ESI return, ensuring accuracy and compliance with regulations, and then submit it to you for review and approval.
• Return Filing: Following your verification and consent, our dedicated ESI professional will proceed to file the ESI return with the ESIC department, completing the process efficiently and securing your compliance.