Employees' State Insurance

The Employees' State Insurance (ESI) is a self-financing social security and health insurance scheme for Indian workers, governed by the Employees' State Insurance Act, 1948. It is administered by the Employees' State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labour and Employment, Government of India.

The ESI scheme provides financial protection to employees during medical emergencies, work-related injuries, maternity, unemployment, or disability by offering benefits such as medical care, cash compensation, and social security.

Applicability of the ESI Scheme

• Coverage of Establishments:
  The ESI scheme is applicable to:

  • Factories and establishments with 10 or more employees (in some states, the threshold is 20 employees).
  • Shops, hotels, cinemas, road transport, and other organizations notified by the government.

• Employee Eligibility:

  • Employees earning a monthly gross salary of ₹21,000 or less are eligible.
  • For employees with disabilities, the salary cap is ₹25,000.

Benefits of the ESI Scheme

1. Medical Benefits:

   • Comprehensive medical care for employees and their dependents.
   • Includes hospitalization, specialist consultation, and medicines.

2. Sickness Benefits:

   • Cash compensation of 70% of wages during certified medical leave, up to 91 days per year.

3. Maternity Benefits:

   • Paid maternity leave for women employees for 26 weeks (extendable in certain cases).

4. Disability Benefits:

   • Monthly compensation for temporary or permanent disablement due to workplace injury.

5. Dependent Benefits:

   • Monthly pension for dependents in case of an employee's death due to work-related injury or illness.

6. Unemployment Allowance:

   • Financial aid for employees who lose their jobs due to retrenchment, closure, or permanent disability.

7. Funeral Expenses:

   • A lump sum amount is provided for funeral expenses of the insured employee.

Contributions Under the ESI Scheme

1. Employer’s Contribution:

   • 4% of the employee’s gross monthly salary.

2. Employee’s Contribution:

   • 0.75% of the gross monthly salary.

Note: Employees earning less than ₹176 per day are exempted from contributing to ESI.

Registration Process for ESI

Step-by-Step Process for ESI Registration:

1. Visit the ESIC Portal:

   • Go to the official ESIC website: https://www.esic.gov.in.

2. Sign Up as an Employer:

   • Select "Sign Up" on the homepage.
   • Provide details such as company name, PAN, email ID, and mobile number.

3. Login to the Employer Dashboard:

   • After sign-up, log in with the credentials sent to your registered email.

4. Fill the Employer Registration Form:

   • Fill out the online form with details such as:
     • Name and address of the establishment.
     • Type of industry or business.
     • Number of employees.
     • PAN and bank details.

5. Upload Required Documents:

   • Scanned copies of:
     • PAN card of the business entity.
     • Address proof of the establishment.
     • List of employees with their salaries.
     • Registration certificate of the establishment.
     • Bank details of the employer.

6. Payment of Contribution:

   • Pay the first ESI contribution online. The amount is calculated based on employee salaries.

7. Receive Employer Code:

   • Upon successful registration, you will receive a 17-digit unique employer code.

8. Generate IP Numbers for Employees:

   • Enroll employees under the ESI scheme by generating their Insurance Numbers (IP numbers) using the employer portal.

Documents Required for ESI Registration:

• Registration Certificate under the Shops and Establishments Act or Factories Act.
• PAN card of the company.
• Address proof of the establishment.
• Details of employees, including name, date of birth, salary, and family details.
• Bank account details of the employer.

Penalty for Non-Compliance:

Non-registration or failure to contribute to ESI may result in penalties, including:

• Fine of ₹10,000 for non-compliance.
• Legal action under the ESI Act.

Importance of ESI Registration:

• Ensures compliance with social security regulations.
• Provides employees with financial security and health coverage.
• Enhances employee satisfaction and retention.
• Avoids penalties and legal consequences.