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If you run a business in Rajasthan, you might have heard about ESI registration. But who needs to get it? In this blog, we will explain who is eligible for ESI registration and why it matters. Whether you are a small business owner, a startup, or someone planning to hire employees, knowing the rules is important. Let’s understand everything step-by-step so that you can stay fully compliant and protect your team.
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ESI registration means enrolling your business and employees in the Employee State Insurance (ESI) scheme. This scheme is made by the government to help workers get medical care, sick leave, maternity benefits, and financial support during accidents or health problems. If a business has a certain number of employees (usually 10 or more in most states) and their salary is within a set limit, it must register for ESI.
It is very important because it protects employees and their families during tough times. It also builds trust between the employer and employees, showing that the company cares about its workers. Plus, registering for ESI is not just a choice — it is a legal rule. If a business doesn’t register even when it’s required, it can face penalties. So, having ESI registration helps businesses stay safe, lawful, and keep their team happy and healthy.
Any company or organization with 10 or more employees is required to register under the ESI scheme. This rule applies to factories, shops, hotels, restaurants, cinemas, newspaper companies, private schools, hospitals, and other establishments. It doesn’t matter if the employees are full-time, part-time, or even working on a contract — if the company has 10 or more people working, ESI registration becomes necessary.
Also, the employees’ monthly salary should be ₹21,000 or less (₹25,000 for people with disabilities) to be covered under ESI benefits. If your business crosses this employee limit or hires people within the salary limit, you have to register. It’s not optional — it’s a legal requirement under the ESI Act.
Registering shows that the company is responsible and cares about its workers’ health and security. Plus, it helps businesses avoid legal troubles later. So, if your company fits these points, ESI registration is a must!
10 employees is must have a company to become eligible for ESI registration. This rule applies in most states in India. In some states, the limit is 20 employees, but mostly, if you have 10 or more people working for you, you need to register under the ESI scheme as we discussed before. It doesn’t matter if they are permanent, temporary, or working on a contract — all types of employees are counted.
Also, the salary of the employees matters. If their monthly wages are ₹21,000 or less (₹25,000 for disabled employees), they are covered under ESI benefits. As soon as your company crosses the employee limit, it becomes mandatory to register.
ESI registration is not just a formality — it is a way to give your employees important benefits like healthcare, sick leave, and maternity help. Plus, it keeps your business safe from legal penalties and builds employee trust.
No, employees earning more than ₹21,000 per month are not eligible for ESI benefits. As we discuss before, the ESI scheme is mainly for workers who earn ₹21,000 or less in a month (or ₹25,000 for disabled employees). If an employee’s salary crosses ₹21,000 after they are already registered, they can still enjoy ESI benefits until the next contribution period ends. But after that, they won’t be covered under ESI anymore.
It’s important for employers to keep checking their employees’ salaries. If someone’s salary goes above ₹21,000, the company needs to update their records. This way, there are no mistakes in ESI contributions.
In simple words, ESI is specially made to support lower-income workers with health and other benefits. Employees who earn more than ₹21,000 have other ways to get health insurance, but they are not part of the ESI system. Keeping this in mind helps businesses stay compliant and avoid problems.
Yes, small businesses and startups can definitely apply for ESI registration in Rajasthan if they meet the required conditions. If a small business or startup has 10 or more employees (or 20 in certain states) and their monthly salaries are ₹21,000 or less, ESI registration is mandatory. It doesn’t matter if the business is new or small — the law is the same for everyone.
Getting ESI registration is actually a good thing for startups. It shows that the business prioritizes the well-being of its employees. It also helps attract and retain good employees because workers feel more secure when they know they have health and other benefits.
Even if you have just reached the minimum number of employees, it’s better to apply for ESI registration on time. It saves you from future penalties and builds a strong foundation for your business as a responsible employer.
Yes, ESI registration is also mandatory for part-time and contractual workers if they meet the salary limit. It doesn’t matter whether someone is working full-time, part-time, or on a contract — if they are working for the company and getting paid, they must be included.
Many businesses think that ESI is only for full-time workers, but that’s not true. The law clearly says that all types of workers are covered. So, even if you have temporary or daily wage workers, they should be added under ESI.
This helps part-time and contract workers get the same medical and social security benefits as regular employees. It also keeps the company legally safe and shows that it values every person working for it.
Yes, there are a few exemptions available for employers under ESI registration, but they are limited. The main exemption is for small businesses that have fewer than 10 employees. In this case, the employer does not need to register for ESI, even if the employees earn ₹21,000 or less. However, in most states, the employee limit is 10, and businesses with 10 or more workers must register.
Certain types of workers are also exempt. For instance, employees earning more than ₹21,000 per month (₹25,000 for disabled employees) are not eligible for ESI benefits. Similarly, workers in some specific industries or locations may also be exempt from the scheme.
While some exemptions exist, it’s always a good idea to check with a legal expert or labor law advisor. They can guide you on whether your business qualifies for any exemptions, ensuring you stay compliant with the law.
If an eligible company fails in the procedure of registering for ESI, it can face serious consequences. The company will be penalized by the government for not following the law. The penalty can include fines and interest on unpaid contributions, which can add up quickly. This can put a financial burden on the business and damage its reputation.
Additionally, if the company does not provide ESI benefits to employees, workers may file complaints, and the company could face legal action. This could lead to court cases or even force the company to pay for the medical expenses and other benefits employees should have received.
Failure to register also means the business is not providing workers with important health benefits, like medical care, sick leave, and maternity benefits. This can result in low employee morale, loss of trust, and difficulty in attracting new talent. So, it’s always better to register for ESI on time and avoid these issues.
In conclusion, ESI registration in Rajasthan is crucial for any business that meets the eligibility requirements. It ensures the well-being of employees and protects the company from legal penalties. If you’re unsure about the process, consulting a labour law consultant in Rajasthan can help guide you through the requirements and keep you compliant.
E Accountax Manager is your reliable partner for all compliance and legal requirements. With our expert team, we help businesses navigate complex processes like ESI registration and other labour laws. We offer personalized services to ensure your business stays compliant with the latest regulations. Our virtual CFO services can help streamline your operations, reduce risks, and improve efficiency. Whether you’re a small startup or a growing business, we provide easy, affordable solutions tailored to your needs. Leave the paperwork to us, so you can concentrate on growing your business.
CA Chetan Agarwal, a Chartered Accountant, is an experienced Labour Law Advisor with a deep understanding of India’s complex labour regulations.
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