Who Is Required to Register for EPF and ESI in India? A Complete Applicability Guide

Mandatory Registration

• Applicable to every establishment or factory employing 20 or more employees.
• Includes both permanent and contract workers.
• Once registered, EPF applies to all employees, regardless of salary.

Voluntary Registration

• Establishments with fewer than 20 employees can opt for voluntary registration under Section 1(4) of the EPF Act.
• Requires mutual consent of the employer and majority of employees.
• Once opted in, EPF becomes legally binding and must be maintained.

Employee Applicability

• All employees drawing basic wages less than ₹15,000/month must be compulsorily enrolled.
• Employees earning above ₹15,000 can opt out only if they were not members earlier and submit Form 11.
• New employees with prior UAN must be registered under the same number.

Legal Applicability of ESI Registration

Mandatory Registration

• Applies to establishments employing 10 or more employees (20 in Maharashtra and Chandigarh).
• Mandatory if at least one employee earns a gross salary of ₹21,000/month or less (₹25,000 for persons with disabilities).
• Covers factories, commercial establishments, hotels, restaurants, hospitals, schools, and shops.

Voluntary Registration

• ESIC does not provide a formal mechanism for voluntary registration.
• However, businesses may apply proactively if they expect to reach threshold limits soon.

Employee Applicability

• All employees earning ₹21,000/month or less are mandatorily covered.
• IP (Insured Person) numbers must be generated and linked with Aadhaar.
• ESI contribution must be deposited even for a single qualifying employee.

EPF & ESI Contribution Rates (FY 2024–25)

Consequences of Non-Registration

• Penalties and interest under Section 14B and 7Q (EPF) and Section 85 (ESI)
• Imprisonment of up to 3 years for willful default
• Disqualification from government contracts and CSR certifications
• Recovery proceedings including bank attachment by EPFO/ESIC
• Loss of employee benefits like PF interest, pension, maternity cover, medical care, etc.

Exemptions from EPF & ESI

• Certain cooperatives and establishments with under 20 employees may be exempt under special notification.
• International workers from countries with social security agreements (SSAs) may have modified compliance rules.
• Apprentices registered under the Apprentices Act, 1961 may be excluded.

Industries Commonly Covered

• IT and software companies
• Manufacturing and engineering units
• Construction and real estate firms
• Hospitals and nursing homes
• Retail stores, warehouses, and logistics providers
• Educational institutions and training centers
• Hotels, restaurants, and canteens

Documents Required for Registration

• PAN card of the business
• Certificate of incorporation or registration
• GST certificate (if applicable)
• Address proof of the office premises
• Bank details and cancelled cheque
• Employee details with salary and date of joining
• Digital Signature Certificate (DSC) of authorized signatory

How OurTaxPartner.com Helps You Stay Compliant

• ✔ EPF and ESI eligibility check and advisory
• ✔ Complete registration support with document filing
• ✔ Monthly challan generation and return filing
• ✔ UAN/IP generation and employee onboarding
• ✔ Notice handling, inspections, and audit support
• ✔ End-to-end compliance tracking and advisory

Click here to register your business for EPF & ESI with OurTaxPartner.com

Frequently Asked Questions (FAQs)

Is EPF registration mandatory if I have only 18 employees?

No, but you may voluntarily register. Once registered, compliance becomes mandatory even if employee count falls later.

Do I need to register for ESI if I only have 2 employees earning below ₹21,000?

No, unless you meet the 10-employee threshold (20 in some states). However, planning for future registration is advised.

What happens if I delay ESI/EPF registration?

You are liable to pay contributions retroactively along with penalties and interest. Inspections and legal action may also occur.

Can a business get exemption from EPF/ESI?

Only under specific notifications or if covered under an approved private trust. Exemption must be officially approved by authorities.

Conclusion

Understanding EPF and ESI applicability is essential to avoid compliance risks and ensure employee welfare. If your business meets the threshold conditions, timely registration is not just mandatory — it protects your brand, finances, and your workforce’s future.

Still unsure about your registration obligations? Consult OurTaxPartner.com today for expert guidance, step-by-step support, and complete compliance management.

Quick Link: Check Your EPF/ESI Applicability & Register Now