Employees' State Insurance (ESI)

The Employees' State Insurance Corporation (ESIC) is a government organisation responsible for managing the Employees' State Insurance (ESI) scheme. This scheme provides essential medical and financial support to employees and their families during times of need. Specifically, it offers aid when an employee cannot work due to illness, work-related injury, or maternity leave.

What is ESI?

ESI (Employees' State Insurance) is a government-sponsored social security program in India, created under the Employees' State Insurance Act of 1948. This scheme protects employees in cases of work-related injuries, illnesses, maternity, and resulting disability or death. To receive these benefits, including medical care and potential wage replacement, employees must subscribe to the program.

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ESIC registration eligibility

The ESI scheme applies to non-seasonal factories and establishments with more than 10 employees (or 20 employees in some states). Employees earning a basic salary of up to Rs. 21,000 per month (Rs. 25,000 for persons with disability) must be covered. These businesses are required to register with the ESIC within 15 days of the scheme becoming applicable to them.

Under the ESI scheme, employers contribute a larger share: 3.25% of each employee's total monthly wages. Employees contribute 0.75% of their monthly wages throughout the year. However, there's an exemption: employees whose daily wages are less than Rs. 176/- are not required to contribute.

Benefits of ESIC registration

Here are some of the key benefits:

• Sickness support: Employees receive 70% of their wages for up to 91 days per year during certified illnesses.
• Extended illness coverage: For 34 malignant and long-term illnesses, employees can receive 80% of their wages for up to two years.
• Family planning assistance: Employees undergoing sterilisation procedures (vasectomy or tubectomy) are eligible for full wages during their recovery period (up to 7 days for vasectomy, 14 days for tubectomy).
• Comprehensive medical care: Employees and their family members receive access to medical benefits through the Employees State Insurance Corporation (ESIC) scheme.
• Maternity benefits: Pregnant women are entitled to full wages during maternity leave (26 weeks, with potential extension by one month).

How to register for ESIC scheme?

To register for the ESIC scheme, follow these steps:

1. Visit the Employees State Insurance Corporation (ESIC) portal and click on the 'Employer Login' option.
2. Click on the 'Sign up' button.
3. Fill in the necessary details in the form and submit it.
4. Check your registered email ID for the username and password.
5. Log in to the ESIC portal using the provided credentials.
6. Select the 'New Employer Registration' option.
7. Choose the 'Type of unit' from the drop-down menu and click 'Submit'.
8. Complete the 'Employer Registration Form' with the required details.
9. After registration, proceed to make the necessary payment.

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Entities Covered Under ESIC

The Employees State Insurance (ESI) scheme extends to a variety of businesses and establishments. As per Section 1(5) of the ESI Act, the following state-governed entities are covered:

• Shops
• Restaurants or hotels focused primarily on sales
• Cinemas (including preview theatres)
• Road motor transport establishments
• Newspaper establishments (not covered under the Factory Act)
• Private medical institutions
• Private educational institutions
• Municipal Corporations or Municipal Bodies (specifically, casual employees)

If establishments mentioned above have a workforce of 10 or more, the owner/employer must register them with the Employees State Insurance Corporation (ESIC).

The central government has expanded ESI coverage under Section 1(5) to include the following types of establishments:

• Shops
• Hotels and restaurants
• Road motor transport establishments
• Cinemas (including preview theatres)
• Newspaper establishments
• Establishments involved in:
  • Insurance
  • Non-Banking Financial Companies (NBFCs)
  • Port trusts
  • Airport authorities
  • Warehousing

Businesses within these categories must have 20 or more employees to require mandatory registration with the ESIC.

Conclusion

The Employees State Insurance Corporation (ESIC) scheme provides essential support to Indian workers. For employers, complying with ESIC registration demonstrates responsibility and care for their employees. For employees, ESIC coverage offers a safety net with medical care, financial assistance during illness or injury, and maternity benefits. Understanding the eligibility and benefits of the ESIC scheme is crucial for both employers and employees.