A Fresh Look at ESI Registration for Startups and Emerging Teams!

Every employee is subject to the same regulations, whether he is working in a startup or a well-established company. However, in the case of startup companies, rules become stricter because they often don’t take standards as seriously. Due to this, the ESI registration for startups helps them adhere to ESI standards.

So, in this blog, you will learn about how ESI registration helps a startup or emerging company.

Mainly, in startups, there are many that lack in them. Due to this, the ESIC also mandates ESI registration for these startups or small companies. The ESI registration is mandatory for startups with 10 or more employees, who have a gross monthly salary of up to ₹21,000. New companies can also apply for the  ESI and EPF at the time of incorporation via the SPICe+ form.

That’s why if your small company has 10 or more employees, then the ESI registration becomes compulsory for you. The ESI eligibility criteria registration provides startup companies much more benefits, such as Legal Compliance, Employee Welfare & Retention, etc. This becomes a bit harder for them to get manually. Therefore, in this blog, you will learn about the ESI certification for startup companies and emerging teams.

1. The Role and Benefit of ESI Registration for Startup Companies

Especially for ESI registration for startups, the government provides many schemes and certifications. When a company is rolling out in its starting phase, it faces many issues during its time period, or in implementing strategies and services. And in the list of certifications.

The ESI registration is one of them, which provides them with many benefits in terms of their employees’ rights and securities. The employees of a startup company always search for different facilities. But when a startup company provides them with the help of ESI standards. So, they become more loyal and progressive after getting many facilities from their job.

Simply, take a look at the role and benefits of ESI PF registration for small companies:

1. Role of ESI Registration for Startups

• In terms of compliance, Many startup companies have ten or more individuals. With the monthly wage up to ₹21,000, the ESI registration becomes compulsory for them under the act of ESI Act of 1948.
• Social Security Funding – This ESI scheme works with the rule of self-financing, which means both the employer and employees have to make monthly contributions that are deposited into a common fund overseen by the Employees’ State Insurance Company (ESIC).
• Risk Mitigation – Mainly, startup companies always fear different types of risks. So, in that case also the ESI registration for startups also protects the employer from medical liabilities in case of workplace injuries. Because this scheme provides them with the recovery cost.
• Improve brand image – Creating brand image, mainly for startups, becomes very hard among its employees and partners. But after following the ESI Acts, it shows a commitment to employee health insurance in India, which directly builds their trust and loyalty, and improves their brand perception in a competitive sector.

2. Benefits of ESI certification for a startup: For employees

• Mainly, employees get many facilities, which include access to ESIC dispensaries and hospitals, including specialist consultations, hospitalization, and surgeries for the employee and their family members.
• Also, they get benefits at the time of any sickness with compensation at 70% of wages for up to 91 days annually. Which is also a good deal for them.
• When any employee gets disabled, then in that case, he also gets full financial support with monthly payments based on the loss of earning capacity.
• Especially for female employees, the standards of ESI mandate paid maternity leave at the full wage rate for up to 26 weeks.

For employers

• By following the important Indian labour laws, the startup HR checklist company in avoid heavy penalties, legal issues, as well as interest on unpaid invoices. But it also faces prosecution for non-compliance.
• When any employer contributes to ESI standards in its company, then those contributions are deductible as business costs according to the Income Tax Act, business costs. This decreases a startup’s income tax. 
• To make a small business compliance company more attractive to its employees. Providing essential health and social security benefits becomes the right choice. which aids in attracting and retaining talent.
• The admin load is reduced by the online registration and compliance procedure, which is frequently integrated with the Shram Suvidha portal.

2. Steps Behind Getting ESI Certification for Startup and Emerging Teams

If you’re a startup owner seeking an ESI certification. Next, you must take a few simple steps. In terms of getting your ESI registration.

For startup companies, getting ESI certification becomes a bit more critical. Due to this, the steps for getting it also increase. So, for obtaining your ESI certification, startups must follow a fully online process via the official ESIC portal. But before applying for your certification, read about the eligibility criteria, whether your company comes under it or not. 

1. Your company must have more than 10 or more employees, with earnings of a monthly wage of up to ₹21,000. Then you can apply for your ESI certification; otherwise, your application might get rejected. A detailed process is provided below:
2. Firstly, go to the official portal of ESIC and sign up. Next, enter your basic details, such as your name, company name, etc. After creating your account, register there with those credentials. 
3. After logging in, fill out the “Employer Registration Form-1”. In which you have to provide the information about the company, the workers, and the employer.
4. Then, after that, provide them with the required documents, which include:

• Business Registration Proof
• PAN Card
• Address proof 
• Bank Details
• Employee Details
• Company Documents

1. Then, after providing them, review your application and submit it. Submit the registration fees, which are very less. And after the successful verification of your application and approval. ESIC will provide you unique 17-digit Employer Code number.
2. Also provides you with the registration letter (C-11) via email. This is your ESI certification. After getting the employer code, you must have to provide each eligible employee individually on the portal to generate their unique Insurance Number and E-Pehchan card.

3. Which Businesses Come Under the Criteria of ESIC Standards?

Mainly, the ESIC provides ESI certification for those companies with 10 or more employees with a monthly salary of ₹21,000. And the list of businesses that come under the standards of ESIC is mentioned below:

1. Non-seasonal factories
2. Shops and commercial businesses
3. Hotels and restaurants
4. Cinemas and preview theaters
5. Road motor transport businesses
6. Newspaper businesses
7. Private educational and medical institutions

So, this is the list of establishments that the ESIC covers under its standards. These are easy targets for ESIC because these businesses mostly contain 10 or fewer employees with an average salary. Also, in order to maintain legal compliance and other benefits for employees, the ESI provides them with the sake of ESI certification for their employer and employees. 

4. Provide Your Startup ESI Benefits with LegalRaasta!

LegalRaasta serves as a dependable ally for business expansion, whether you are a founder, a manufacturer, or managing a startup.

Our team at LegalRaasta provides a wide range of services, including ESI registration for startups, to ensure you manage your finances effortlessly. Finding an ESI certification can be challenging, but you can count on us for expert guidance to navigate your business through uncertain markets.

Also, we give more than just financial services, which include:

• GMP certification
• Virtual CFO services
• LLP registration 
• PF registration 
• NBFC enrollment

among other things,

making sure that all your legal and rules needs are done in one place. This shows hands-on skill, quick steps, and a promise to your long-term growth. So, dive into the deep ocean of legal and corporate services with LegalRaasta professional services.