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Employees State Insurance Corporation

ESI Scheme

Last Updated 15th Aug 2020

6th August 2020 – RBI keeps Repo Rate unchanged at 4%

ESI scheme is a self-financed scheme managed by Employees State Insurance Corporation to provide social protection to workers.

ESI Benefits ESI Amount Eligibility
Medical Benefits No limit Any employee registered under the ESIC act.
Sickness Benefits 0% of the daily wage of employee for 91 days Employee who have contributed for 78 days in contribution period of 6 months
Disability Benefits 90% of the wages of the employee Injury happens at the workplace

What is ESIC?

ESIC or Employees State Insurance Corporation is a statutory corporate body set up under the ESIC Act 1948 which provides financial coverage to workers against sickness, maternity, disablement, Occupational disease or death due to employment injury. ESIC Act 1948 stands for Employee State Insurance Act, 1948. The act was the first major legislation to promote social security of workers and was introduced at a time when the industries were still in the nascent stage with the workforce working in selective industries such as jute, textile, chemicals etc.

Features and Benefits of ESI

The ESI scheme managed by the Employees State Insurance Corporation provides a host of medical and sickness benefits to employees enrolled under the ESI Scheme:

  • Medical Benefits: ESIC provides medical benefits to the employees and their family members for coverage of medical expenses from the first day of employment. There is no ceiling on the amount of funds provided to the insured employees or the family members for the treatment.
  • Sickness Benefits: Employees can claim 70% of their daily wages for a maximum period of 91 days during the sick leave. Employees enrolled in ESIC are ensured a regular cash support during any sick leave availed. They can however, receive the cash compensation for the sickness if they have contributed for 78 days in a contribution period of 6 months.
  • Disability Benefits: In the case of temporary or permanent disability, ESIC ensures that the financial benefits are provided to the employee during the time of injury. In case of temporary disability 90% of the wages is paid as long as the disability continues irrespective of the contribution period. Employees can receive disability benefits at the rate of 90% on the monthly basis depending on the loss of earning as certified by the Medical board.
  • Maternity Benefits: Under the ESI benefits, ESIC provides the following compensation at the time of maternity:
    • 100% of the daily wages for 26 weeks from the time of going into labour.
    • Six weeks in case of a miscarriage.
    • Twelve weeks of pay is provided in the case of an adoption.
  • Death benefits: The family of the employee is provided 90% of the daily wages every month if the employee dies at the workplace.
  • There are several other ESI benefits offered by ESIC, which are Funeral expenses, Old age care medical expenses, Physical Rehabilitation and Vocational Training. An amount of ₹ 15,000 are provided for the funeral expenses to the dependents of the family or the people who perform the last rites. Physical rehabilitation and expenses for the vocational training are provided in case of physical disablement at the place of employment and to permanently disabled Insured Person for undergo training at VRS respectively.

ESI Contribution

According to the ESI Act 1948, the contribution for the ESI scheme is made by both the employer and employee at the specified ESI Contribution rate which is currently at 0.75% for an employee and 3.25% for an employer. The employer can collect the employee's ESI contribution from the wages bill and make its contribution within 21 days of the due month of the ESI scheme. The two contribution periods each of 6 months starts from 1st April to 30th September and 1st October to 31st March of next year.

ESI Contribution Rate

ESI contribution rates are revised from time to time, and presently the employee's contribution rate and employer's contribution is 0.75% of the wages and 3.25% of the wages respectively. In cases where employees earn a daily average wage, upto ₹ 50 they do not need to make any contribution in the ESI scheme; however, employers must contribute their own share in respect of these employees.

ESI contribution Previous ESI Rate Current ESI Rate (Revised w.e.f 1st July, 2019)
Employer Share 4.75% 3.25%
Employer Share 1.75% 0.75%
Total 6.50% 4.00%

ESI Eligibility Criteria

To get the ESI benefits such as medical, disability, maternity and unemployment allowance under the ESIC you must be able to meet the following eligibility criteria

  • Under Sec 2(12) of the ESI Act, 1948 any individual working in the non-seasonal factory with more than 10 employees.
  • Employees working in sectors such as Hotels and restaurants, Newspaper establishments, Road-motor transport undertakings, Cinemas and preview theatres and Private Educational and Medical institutions with a strength of more than 20 employees.
  • The existing wage limit of the employee is ₹ 21,000 per month and if the employee has any disability, the wage limit for coverage is ₹ 25,000 per month.
  • To receive the social security benefits of the ESI scheme employees should draw wages up to ₹ 10,000 per month.

ESIC Registration

Under the ESI Act, 1948, any establishment which has more than ten employees in the organisation and having a maximum salary of ₹ 21,000 per month should mandatorily apply for ESI registration under the ESIC within the 15 days of coming under the ESI act.

Documents Required for ESIC Registration

You need to submit the following documents for ESI registration under Employees State Insurance Corporation:

  • A registration certificate of the organisation
  • A list of all the employees in the Establishment along with the compensation details of all the employees
  • Certificate of Registration in case of Company
  • Partnership deed in case of a Partnership
  • Articles of Association and Memorandum of Association of the Company
  • PAN Card of the organisation and employees.
  • A cancelled cheque of the Bank Account
  • List of Directors of the Company
  • List of the Shareholders of the Company

Procedure to Register for ESI

  • Once you have collected the essential documents, you can download the form No – 1 (Employers Registration Form) from the website and fill the form and submit the essential documents You can also download the PDF version of the form and submit the duly filled Employee Registration form along with the documents on the website.
  • After the submission of form, ESIC will verify the form and documents, and will issue a 17-digit registration number to the organization. The employers will also receive ESIC login user name and password along with the code on the email id.
  • After receiving the ESI registration number, the organisation can file their ESI fillings. To submit the ESIC returns, employers would require the following documents:
    • Register for Form 6
    • Attendance register
    • Inspection book
    • Register of wages
    • Register of any accidents on the premises
    • Returns and monthly challans submitted for ESI
  • Employees also need to submit the required form about the details of the family, along with their photographs. After submitting the form, they will be issued an ESIC card.

ESIC Login

The Employee Insurance Corporation allows ESI registration through the official portal of ESIC. After initiating the process of registration, employers will be provided 17-digit code along with ESIC credentials on the email id. These credentials such as 'Labour Identification Number' and Password can be used by the employers for ESIC login.

ESIC Employer Login

To login on the ESIC official portal, employers need to follow these steps.

  • Visit the link https://www.esic.nic.in/insured-person-employer-login.
  • Click on the employer login button which will redirect you to the external link.
  • On the external link, you will find the 'Click here to login' button on the right hand of the screen.
  • Fill in the necessary credentials such as 'Labour Identification Number' and Password for ESIC login.
  • After doing the ESIC registration login provide the essential details of the employee such as details of his family members, address of all the members, and the clinic from where he/she is already taking medical treatment or would like to take in the future.
  • Once the process of ESIC registration login is completed, the employee will receive an insurance number which is unique for every employee and is used by an employee for ESI login.

ESIC Employee Login

The employee whose registration is completed by the employer is known as the insured person. The insured person can do the ESIC login using the following steps.

  • Click on the link https://www.esic.nic.in/insured-person-employer-login.
  • Find the 'Insured person login' on the page displayed.
  • As you click on the button, you will be redirected to the external link.
  • Fill in details such as User Number, which is an insurance number of the employee and Captcha.

FAQs

What is the current ESI contribution rate?

Presently, the ESI contribution rate is 4.00%, out of which the employer and employee contribute 3.25% and 0.75% of the wages of employee respectively.

How is the ESI contribution calculated?

ESI is a self-funded scheme in which employee's contribution rate and employer's contribution is revised periodically. Presently, the employee and employer contribute 0.75% and 3.25% of the employee's wages, respectively.

What is the ESI limit?

The existing wage limit under the ESI Act, 1948 is Rs. 21,000 per month. In case of any disability, the wage limit for coverage is Rs. 25,000 per month.

Can we use ESI in a private hospital?

Under the ESI Act, 1948, an employee can avail the medical benefits only from the ESIC dispensaries or hospitals.

Is ESI mandatory for employees?

No if the employees earn a daily average wage upto Rs. 50, they do not need to make any contribution in the ESI scheme.

Where is ESI not applicable?

ESI is not applicable in the states of Nagaland, Manipur, Tripura, Sikkim, Arunachal Pradesh and Mizoram.

Is ESI deduction compulsory?

Any establishment which has more than ten employees in the organisation with maximum salary of Rs. 21,000 per month should mandatorily apply for ESI registration.

What is the ESIC benefit period?

There are two ESIC benefit periods, 1st January to 30th June and 1st July to 30th December. ESIC benefit period starts three months after the completion period of contribution period of ESIC, which starts from 1st April to 30th September and 1st October to 31st March of next year.


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