Employee's State Insurance Corporation
Welcome to our comprehensive blog dedicated to the Employee’s State Insurance Corporation (ESIC). Established in 1952 under the provisions of the Employees’ State Insurance Act, ESIC stands as a cornerstone of India’s social security framework, ensuring the welfare of millions of workers across various sectors. As a pivotal institution, ESIC provides a wide array of benefits including medical, financial, and rehabilitation assistance to employees and their dependents during times of need.
Through this platform, we aim to offer an insightful exploration of ESIC’s functions, regulations, and contributions to the Indian workforce. Our blog will serve as a resource hub for employers, employees, policymakers, and anyone seeking a deeper understanding of ESIC’s role in safeguarding the rights and well-being of workers.
WHAT IS ESIC?
The Employees’ State Insurance (ESI) programme is administered by ESIC (Employees’ State Insurance Corporation), an independent organisation under the Indian Ministry of Labour and Employment. ESIC oversees the ESIC plan as a statutory authority. The Indian government offers this social security programme to give its workers socioeconomic security.
By offering health insurance and medical care for illness, injury, pregnancy, and death, the Employees’ State Insurance (ESI) seeks to safeguard them. Because the programme is self-financing, employees who regularly contribute to it with their pay are eligible to get these benefits. Employers contribute 3.25% of an employee’s salary, while the fixed contribution rate for ESIC is 0.75% of that amount. The families of covered employees receive medical care.
Enrollment and regular contributions are required by all factories and organisations covered by the Employees’ State Insurance Act that pay wages of Rs. 21,000 and have more than 10 employees. Workers who receive a daily wage of less than Rs. 137 are not eligible for this scheme.
WHAT IS THE EMPLOYEES’ INSURANCE ACT, 1948?
Social security is provided by the Employee State Insurance Act of 1948. The government sent Professor B.P. Adarkar in 1943 to write a study on the industrial workers’ health insurance programme. The ESI Act was based in part on this research.
This Act envisioned a social insurance programme to shield workers against illness, pregnancy, disability, accidents, and death—all of which can reduce an employee’s ability to make a living. It also included insurance for the workers’ close relatives. The ESIC was created by the Central Government after the ESI Act was declared, and it was then applicable to all establishments covered by the Act, not just industrial workers.
WHAT ARE THE BENEFITS OF ESIC?
Employees participating in the Employees’ State Insurance programme and paying a monthly contribution are eligible for six major advantages.
The six benefits of ESI as listed in section 46 of the ESI Act are:
- Sickness Benefit: A worker’s sick benefit is equal to 70% of their pay. If an insured worker becomes ill, they are entitled to this benefit, which lasts for 91 days, or almost three months, per year. A worker has to have worked for 78 days during the contributing period to be eligible for this reward.
- Extended sick leave: For 38 long-term illnesses, sick leave may be prolonged for a maximum of two years at an increased contribution rate of 80%.
- Enhanced sickness benefit: If the covered worker has a vasectomy or tubectomy for family planning, the aforesaid rate is increased to 100% for up to seven days.
- Disablement Benefit: Benefits for disabled people can be split into:
- Temporary disablement: Until the injury heals, ESIC offers monthly benefits for temporary disablement. A person’s contribution rate is 90% of their pay. Even in cases when they haven’t contributed, employees are still eligible to get this benefit.
- Permanent disablement: Depending on the severity of the damage or impairment, the Medical Board decides how much compensation is appropriate for permanent disablement.
- Maternity Benefit:A 26-week pregnancy is eligible for maternity benefits. Considering that the individual has contributed for 70 days, this term may be extended by one month at the rate of full pay.
- Dependent’s Benefit:When an employee dies as a result of a work-related accident or danger, this payout is given to their surviving dependents.
- Medical Benefit:The amount spent on the insured employee’s medical care has no upper limit. The insured’s immediate family members are also eligible for this benefit. Retired workers and those who are permanently incapacitated can also receive medical treatment for an annual premium of Rs. 120.
Other Benefits:
i) Funeral costs
The person in charge of carrying out the funeral rites or the dependents of the deceased receives this payment. The compensation that is due is Rs. fifteen thousand.
ii) The cost of confinement
The covered person or woman will be responsible for payment if the confinement takes place in an area without access to the medical facilities specified in the ESI plan.
iv) Rehabilitating physically and vocationally
Benefits for vocational rehabilitation are given to insured workers who are receiving rehabilitation training and are permanently disabled. The term “physical rehabilitation” describes situations in which a job injury has left a person physically disabled.
iv) Medical care for the elderly
This benefit is payable to employees who are retiring owing to old age or infirmity, who are unemployed due to a permanent injury, or who are participating in a voluntary retirement scheme. This benefit comes with a monthly salary of Rs. 120.
WHEN IS ESI REGISTRATION REQUIRED?
Enrollment in the ESI plan is mandatory for factories and other establishments in Indian states and Union Territories (UTs) that are listed under the ESIC Act, 1948 and employ more than ten people. Additionally, those who employ 20 or more people in Maharashtra, Chandigarh, or other ESIC-covered states, need to register for the ESI plan.
This scheme applies to workers earning less than Rs. 21,000 per month and requires mandatory ESIC registration. It does not apply to anyone earning more than Rs. 21,000. The highest salary that can be paid to employees who are temporarily or permanently disabled is Rs. 25,000.
Additionally, employees whose daily pay is less than Rs. 137 are not eligible for this scheme. However, these earnings are supported by the employer’s contribution. The updated employee contribution is now 0.75% of pay, while the employer’s contribution is 3.25%.
HOW TO APPLY FOR ESIC REGISTRATION?
Entities have fifteen days from the date of application to register themselves. It is required of qualifying entities to apply. Online and manual registration are the two available methods. ESIC online registration is now only done. Physical document submission is not necessary either before or after registration.
Step 1: Go to the ESIC official website and click on the sign-up option
Step 2: Enter the following details:
Company name
Employer name
State and region
Email address (will be the username)
Contact details
Step 3: Click on the checkbox and tap on submit
Step 4: Check the email from ESIC encompassing the username and password
Step 5: Visit the ESIC website and enter the username and password details
Step 6: Click on ‘New Employer Registration,’ and select the type of unit
Step 7: On the new page, enter the name of the unit along with the necessary postal addresses
Step 8: Enter if the building is owned/hired, nature of business, PAN, and other details before clicking on ‘Next’
Step 9: On the next page, enter information related to commencement of the factory, license, constitution, owners and their designations, and click on ‘Next’
Step 10: Enter the total number of employees working and those earning less than Rs.21,000 and the date of joining of the first 10 or 20 employees. Click on ‘Employee Declaration Form’
Step 11: Select employees who are and are not registered, then click on ‘Continue’
Step 12: Enter the information of IP and click on submit.
Step 13: Confirm that all details have been entered and click on ‘Close’.
Step 14: On the new page, select the ESI branch office and inspection division and click on the checkbox to confirm that all information entered is correct
Step 15: Click on ‘Pay Initial Contribution’ before clicking on ‘Submit.’ Save the challan number for future reference and click on ‘Continue’ to complete the payment process
The system-generated ESI Registration Letter, or C-11, will serve as documentation of the company’s ESIC registration once payment has been received.
DOCUMENTS REQUIRED FOR ESIC REGISTRATION
Establishments must submit the 11 fundamental documents listed below in order to register an account with the ESIC:
- Articles of Association and Memorandum of Association of the company
- Certificate of Registration issued under the Factories Act or Shops and Establishment Act
- Registration certification in case of a company, partnership deed, or LLP
- List of all employees working under the employment contract of the company/factory along with their details
- Compensation and attendance details of the employees
- Company’s and employees’ PAN details
- Copy of GST registration license
- Cancelled cheque from the company
- List of existing shareholders and directors of the company
- Digital signatures and contact details of directors, partners, or proprietors as required
- Employer’s Registration Form to be filled and uploaded on the ESIC website.
ELIGIBILITY FOR ESCI
Who is eligible?
Companies covered by the ESIC Act that have 10 employees (or 20 in some states) are eligible for ESI. Workers who make more than Rs. 21,000 are not qualified for ESI benefits. The salary cap for employees with impairments is Rs. 25,000.
Who is NOT eligible?
Less than 10 or 20 employees per factory, company, or other entity are not eligible for the ESIC plan. Additionally, workers making more than Rs. 21,000 are not qualified. Additionally, workers with disabilities and those making more than Rs. 25,000 are not eligible for this scheme.
ESIC CONTRIBUTION RATES
Less than 10 or 20 employees per factory, company, or other entity are not eligible for the ESIC plan. Additionally, workers making more than Rs. 21,000 are not qualified. Additionally, workers with disabilities and those making more than Rs. 25,000 are not eligible for this scheme.
Particulars
Previous rate
Current Rate
- Employee's contribution
- Employee's contribution
- Total
- 1.75% 3.25%
- 4.75%
- 6.50%
- 3.5%
- 0.75%
- 4.00%
In conclusion, the Employee’s State Insurance Corporation (ESIC) stands as a beacon of support for millions of workers in India, providing essential benefits and services that contribute to their well-being and security. Through this blog, we’ve aimed to shed light on the significance of ESIC, offering insights, updates, and guidance to help individuals navigate its complexities effectively. As we continue to advocate for the rights and welfare of employees, we invite you to stay engaged with us, contribute to the conversation, and remain informed about the latest developments in the realm of employee benefits and social security. Together, we can work towards a more inclusive and supportive workforce environment.