Employee state insurance corporation (ESIC) is a comprehensive insurance system that safeguards the employee is situations like disability, sickness, maternity as well as in case of the demise. All the benefits administered are in line with the International labour organisation. ESIC administers the ESI (Employee state insurance).
Who is covered?
Current coverage includes the following:
- Non-seasonal factories employing 10 or more persons- under Section 2(12)
- Shops, hotels, restaurants, cinemas, road motor transport undertakings, newspaper establishments employing 10 or more persons- under Section 1(5)
- Further, under section 1(5), the scheme has been extended to private medical and educational intuitions employing 10* or more in certain states/UTs
- Existing wage limit for coverage is Rs 21000/month
Apart from the worker, the care is also provided to the immediate dependants!
Benefits offered by ESIC
The contribution of the employee is as per his/her ability; however, medical benefit is based on the need! ESI provides the medical care to the self and the family from the day of entering the insurable employment. Various benefits provided are:
- Sickness benefit
- Medical benefit
- Maternity benefit
- Disablement benefit
- Funeral expenses
- Benefits to dependents
ESIC also provides monthly unemployment allowance for a maximum of 24th months in case of involuntary loss of employment/permanent invalidity due to non-employment injury.
How it works:
The employee and the employer pay their mutual yet mandatory contribution in the scheme.
The employer pays a certain percentage of the wages being paid to the employee whereas the employee pays the percentage that is lower than the employer. Currently, the employee’s contribution is 1.75% of the wages whereas the employer’s rate is 4.75% of the wages being paid. In certain new industry sectors added, the rate paid by the employee is 1% whereas the employer pays 3% for the first 24 months of the employment.
The contribution is generally collected by the employer after deducting the employee contribution from the paid wages and total collection (Employee + employer) is paid to the ESIC by the mid of the coming month.
The ESI is now notified in 526 districts in 34 states and UTs, yet to be implemented in Arunachal Pradesh and Lakshadweep.