The Employee State Insurance Scheme of India is a multidimensional social system tailored to provide socio-economic protection to the worker population and their dependents covered under the scheme. It provides all medical facilities for self (contributor) and their dependents, which is admissible from day one of insurable employment.
Insured persons are also entitled to a variety of case benefits in times of physical distress due to sickness, temporary or permanent disablement or any medical condition which results in loss of earning capacity. Dependents of insured persons who die in industrial accidents or because of an employment injury or occupational hazard are entitled to a monthly pension called the dependant’s benefit.
The due date for monthly contribution filing and payment of ESI returns is on or before the 15th of the following month, to the month to which the salary relates. E.g.: If ESI is deducted from the salary of Sept month, then the remittance has to be done on or before the 15th of Oct.
What is the Employee State Insurance Act, 1948?
The Employee State Insurance Act, 1948 consists of certain health related eventualities of employment’s such as sickness, temporary or permanent disablement, maternity, occupational diseases and death due to the employment injury which may lead to total or partial earning capacity. The Act has made provisions to counterbalance or negate such physical or financial distress by providing medical and financial aid to insured persons and their families. The ESI scheme is administered by Employees State Insurance Corporation (ESIC), an autonomous body under the Central Government of India, and is governed by the Ministry of Labour and Employment, Government of India.Employee State Insurance Act, 1948(ESI) applicabile For :
- The ESI Act applies to all non-seasonal power using factories employing 10 or more persons and non-power using factories and establishments employing 20 or more persons.
- The scheme was further extended to hotels, shops and other establishments with 20 or more employees.
- A provision has been introduced for those classes of establishment, which engage in hazardous or life-threatening activities. In these classes of establishment, ESI will be applicable even if only one worker is employed.
- Provisions for voluntary inclusion have also been introduced where an employer of a plantation may opt for ESI scheme by giving willingness to the ESI Corporation.
- Voluntary membership under ESI scheme can be taken even if the number of employees in an establishment is less 10. Where an employer and a majority of the employees of an establishment agree to be covered by ESI, then on an application made by the employer, the Director General of ESIC may allow the applicability of ESI to such establishments.
ESI coverage and contribution:
All employees, casual, temporary or contract workers whose gross earnings are less than Rs.21, 000 per month (with effect from 1st July 2019) are covered under the ESI Act, 1948.ESI contribution:
Contribution to ESI is made both by the employer and the employee. The rate of contribution is:- Employee’s contribution – 0.75% of the gross earnings.
- Employer’s contribution – 3.75% of the gross earnings.
Contribution Period | Benefit Period |
1st April to 30th Sept | 1st Jan of the following year to 30th June |
1st Oct to 31st March of the following year | 1st June to 31st December |
Eligibility check period:
If an employee is eligible for ESI i.e., if their salary is less than 21,000 and they are given an increment in the middle of the contribution period, then they will be eligible for ESI and its benefits till the end of that contribution period. Once that contribution period is over, they will not fall under ESI anymore.ESI benefits:
The benefits under the Employee State Insurance scheme can be broadly classified as follows: Primary Medical Care – These facilities are provided to the insured person and their family. There is free treatment, and it is also applicable to retired and permanent disabled persons and spouses. A token payment of Rs. 120 is required to be remitted annually for retired persons to avail this benefit. Specialists and Diagnostic Services – It is provided for the insured person and their dependent’s families for specialist consultation which is provided at the specialist or diagnostic centre. In-patient care – It is provided at the hospitals, which are constructed by the ESIC or reservation of beds, which is owned by the state government or local and private organisations. Basically, this scheme pays for these beds on the basis of occupied beds days. Disablement Benefits – Under the disablement benefits, there are two categories –- Temporary Disability Benefits – At the rate of 90% of wages, it is payable till disability continues.
- Permanent Disability Benefits – It is also payable at the rate of 90% of wages in the form of payment. And it depends upon the loss of earning capacity as certified by the medical.
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