Employee State Insurance or in short we say ESI is a scheme started for Indian workers by the Government of India under its autonomous body Employee State Insurance Corporation (ESIC). It is a self-financing health insurance scheme, which helps an employee and his family member by providing medical cover and also provides financial help during the period of incapacity by providing the loss of wages during that period, the incapacity includes sickness, maternity, disablement, or even on the death of an employee, etc.
- Medical Benefit is provided to all the employees and their family members who are registered under ESI. There is no limitation on expenditure on the treatment of an Insured employee or his family member.
- Sickness Benefit is provided in the form of cash compensation at the rate of 70%, during the period of certified sickness for a maximum of 91 days in a year.
- Maternity leave is allowed up to 3 months which may extend 1 more month on the medical advice, all the leaves taken are paid leaves.
- In case of death occurs on employment or an employee is disabled during his work, then 90% of his salary is given to his dependent every month.
- A sum of Rs. 10,000 for funeral expenses is also provided to the dependent.
- Medical expenses are also provided for old-age care.
Applicability & Contribution:
ESI applies to all the factories and establishments (specified in Act) who have 10 or more employees and the wages of such employees are not more than Rs.21000/- per month.
The following entities are covered under ESI Act are:
- Newspaper establishment.
- Private educational institutions.
- Restaurants or Hotels only engaged in sales.
- Road motor transport establishments.
Total ESI contribution that is to deposit to the ESI fund is 4% every month in which the employers are required to contribute 3.25 % and the employee is required to contribute 0.75% of the wages payable.
Documents required for registration:
The basic documents in order to register the entity are as follows:
- PAN card of the entity as well as the employees and address proof of the entity.
- Memorandum of Association(MoA), Article of Association(AoA), Trust deed, or a Partnership deed based on the type of the entity.
- A registration certificate obtained under the Factories Act or Shop Establishment Act.
- List of all the employees working with their monthly compensation in detail.
- Canceled cheque of the bank account of the company.
- List of the Directors and the Shareholders of the company.
- A register containing the attendance of the employees.
Process of Registration:
- Once the Act is applicable and you accumulate all the documents mentioned above, now you only have to register within 15 days from the applicability of Act. So the first step is submitting the employer’s registration form (Form-01) to the relevant regional office.
- A PDF format of the form is available on the website of ESIC. Fill in the form and submit it on the official website. Link(esic.in/ESICInsurance1/ESICInsurancePortal/Signup.aspx)
- Once you have successfully verified, a 17 digit unique code will be provided to the organization. The ESI filing can be done only if you have this code.
- At the time of joining employment, the employees are required to fill in a Declaration Form (Form1) and they have to submit two copies of the photograph and detail of their family member to the employer, which must be submitted by this employer to the relevant ESI Branch Office.
- Now the employee will get a temporary ESI card for availing benefit.
- The registration is permanent, but any changes like employee additions need to be intimated to the ESIC. A person once got registered need not register again when there is a change of employment. The same registration can be transferred from one employment to another.