ESI Full Form, Eligibility, Features, And Benefits

ESI or Employee State Insurance is the insurance provided to employees by their employers. ESI’s provisions are taken care of by the Employee State Insurance Corporation, which is the apex regulatory body of the ESI contributions in India. You may think of ESI as the company benefits for the employees that involve insurance protection in the organized sectors. The ESI scheme extends insured protection to the employees in the event of pregnancy/maternity, disability, sickness, death, or any work-related injuries. It also extends medical care to the employees as well as their families.

ESI Eligibility

The government has been emphasizing the importance of employee benefits and thereby taking up measures to execute the same. Employee State Insurance has been made mandatory for certain employees. The ESI scheme applies to all the establishments and factories employing 10 or more persons where the beneficiary’s wages do not exceed Rs. 21,000. These form part of the company benefits for the employees.

Features of The ESI Scheme

The following are the benefits of the ESI scheme for the employees:

• The benefits under the ESI scheme can be bifurcated into two categories, i.e.,
  • Cash benefits normally include maternity, sickness, temporary or permanent disablement, rehabilitation allowance, funeral expenses, etc. 

• Non-cash benefits like medical care, etc.
  • Employees are provided with complete medical care.
  • In case of absenteeism from work due to factory accidents, illness, maternity, etc., resulting in loss of wages, financial assistance is provided to such employees to compensate for the wages.
  • Medical care by the families of the employees can be availed as well through the ESI scheme.

The benefits under the scheme are self-financed in the sense that it is provided from the contributions made by the employees and employers.

ESI Registration Process

The ESIC registration process is simple, and employers who fall under the applicability should get themselves registered under the ESI scheme. The registration process for ESI is entirely online and does not require any physical documentation submission. However, the organization should meet the criteria of the minimum number of employees for obtaining registration under the ESI scheme. Once registered, the employer can use the ESIC employer login to adhere to compliance with ESIC rules. The minimum employee requirement varies from state to state. Following is the list of the employee requirement under ESIC:

Sr. No.	State	Minimum Employees to be Registered	Sr. No.	State	Minimum Employees to be Registered
1	Himachal Pradesh	20	19	Delhi	10
2	Jammu & Kashmir	20	20	Karnataka	10
3	Jharkhand	10	21	West Bengal	10
4	Kerala	10	22	Andhra Pradesh	10
5	Madhya Pradesh	20	23	Arunachal Pradesh	20
6	Maharashtra	20	24	Assam	20
7	Manipur	20	25	Bihar	10
8	Meghalaya	20	26	Chhattisgarh	10
9	Mizoram	20	27	Goa	20
10	Nagaland	20	28	Gujarat	10
11	Orissa	10	29	Haryana	10
12	Pondicherry	10	30	Uttarakhand	10
13	Punjab	10	31	Chandigarh	20
14	Rajasthan	10	32	Daman and Diu	20
15	Sikkim	20	33	Dadra and Nagar Haveli	20
16	Tamil Nadu	20	34	Andaman and Nicobar Island	20
17	Tripura	10	35	Lakshadweep	20
18	Uttar Pradesh	20	36	Outside India	20

ESI Contribution Rates

ESI contribution rates are subject to change from time to time. Both the employers and employees are required to make ESI contributions. Currently, the employees shall contribute 0.75% of their wages to the ESI scheme, whereas the ESIC employer contribution shall be 3.25% of the wages paid or payable to the employees in each wage period.

However, employees whose daily average wage is up to INR 137/- are exempted from making contributions to the ESI scheme. However, the employer shall contribute their share in respect of such employees.

Under the law, the employer shall deduct the contributions to be made by the employees from the wages payable and shall pay the contribution so deducted to the ESIC within 15 days after the end of the calendar month in which the contribution falls due.

How To Manage Payments?

Automating payments is more important than ever as the salary composition includes various statutory dues like provident funds, TDS, professional tax, ESI, etc. 

However, it can be taxing for you to take care of these monthly payments, especially when you have countless duties as an employer. The good news here is—we understand your pain. Therefore, we have the perfect solution for you! With PayU Payouts, you can automate the entire payroll processing. This means that all the statutory dues you have to pay out monthly are automatically deducted from the salary you have to pay to the employees. What’s more, you can also facilitate the periodical filing of returns by employers. It doesn’t only reduce the burden off of your shoulders; it also diminishes the chances of errors that often arise with human filing. All of this with timely statutory compliances! 

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