Employee State Insurance (ESI) is a social security scheme in India, designed to provide financial protection to employees in case of sickness, maternity, disability, and death due to employment injury.
The government introduced the ESI scheme for Indian workers. ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation (ESIC). The ESIC is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India.
ESI scheme provides social security to the workers. Employers and employees contribute a percentage of employee’s wages towards ESI every month. Huge variety of medical, monetary and other benefits are provided to workers covered under the ESI Act.
Any non-seasonal factory or establishment having more than 10 employees (in some states it is 20 employees) who have a maximum basic wages/salary of Rs. 21,000 per month (Rs.25,000 per month in the case of persons with disability) are covered under the ESI scheme and thus, they have to mandatorily register with the ESIC within 15 days from the date of its applicability.
Under this scheme, the employer needs to contribute an amount of 3.25% of the total monthly wage payable to the employee whereas the employee needs to contribute only 0.75% of his monthly wage every month of the year. The only exemption to the employee in paying his contribution is whose daily wage is less than Rs.176/- per day.
Employee State Insurance (ESI) is a social security scheme in India, designed to provide financial protection to employees in case of sickness, maternity, disability, and death due to employment injury.
As for workers or employees, they are covered or entitled under ESI when they earn less than Rs. 21,000 per month and Rs. 25,000 in the case of a person with disability. The worker contributes 0.75% of their salary while the employer contributes 3.25% towards the ESI scheme.
To register an employee under ESI, the employer needs to register the establishment with the Employees’ State Insurance Corporation (ESIC) and provide details of employees to the ESIC portal.
ESI provides benefits such as medical care, maternity leave, disability coverage, funeral expenses, and more to insured employees and their families.
Employers can make ESI contributions through the ESIC portal by uploading the employee details and making the payment online.