Employee State Insurance act 1948 sets up statutory body which is named as Employee State Insurance Corporation the main aim of this corporation is administration of Employees State Insurance Scheme

Employee State Insurance Scheme is devised for the development of social security of employees who are covered under the act it protect the employees from financial distress which could be due to any unfortunate and sudden event

Employees State Insurance Scheme provides complete medical care at the time of and capacity of the employees if the employee is not working due to any reason such as illness or maternity or any factories injury which could potentially result in loss of wages at such time this scheme helps the employees to compensate against the loss of wages this scheme not only covers the employees but their families as well

To which companies is the employees State Insurance Scheme applicable?

Employees State Insurance Scheme is applicable to any establishment which has more than 10 employees whose wages does not exceed 21000 rupees (the threshold for employees is 20 in Maharashtra) this limit is 25000 rupees for an employee with disability

The following establishment employing 10 or more person are covered under ESI scheme: shop, hotels, cinema, road motor transport establishment, newspaper establishment, private education Institution and medical institution

How much is the contribution is to be made by the employer and employee?

Employee contribution is 0.75% an employer contribution is 3.25% of the wages paid these contributions are paid monthly

Formerly the contribution rate was 4% of employers and one percent of employees which made a total of 5% these limits are reduced to the current limit with effect from 1st July 2019

Exemption to the Employees?

The employees whose daily wages is below 137 rupees are exempted from making any contribution towards Employee State Insurance Scheme in such cases only the employer is liable for the payment of their share towards the Employee State Insurance Scheme

Although employees are liable for their contribution generally the employer deducts the employee’s contribution towards Employees State Insurance Scheme from the wages and deposits it with the corporation within 15 days from the last day of calendar month in which the contribution is due. This payment can be made online or through designated public sector bank 

Benefits under the scheme

Following are the benefits cash benefits and non-cash benefits:

• Periodical payments to any Insured Person in case of his sickness certified by a duly appointed medical practitioner
• Periodical payments to an Insured Person being a woman in case of confinement or miscarriage or sickness arising out of pregnancy, confinement, premature birth of child or miscarriage
• Periodical payments to an Insured Person suffering from disablement as a result of an employment injury sustained by him as an employee
• Periodical payments to an Insured Person suffering from disablement as a result of an employment injury sustained by him as an employee
• Periodical payments to such dependants of an Insured Person who dies as a result of an employment injury sustained by him as an employee
• Medical treatment for and attendance on Insured Persons
• payment to the eldest surviving member of the family of an Insured Person who has died, towards the expenditure on the funeral of the deceased Insured Person, or, where the Insured Person did not have a family or was not living with his family at the time of his death, to the person who actually incurs the expenditure on the funeral of the deceased Insured Person (to be known as funeral expenses) 

Role of employees State Insurance Corporation

It is a statutory body that administers ESI scheme employees State Insurance Corporation has members which represent the central government the State Government employee’s employers as well as members of parliament

How does the ESIC scheme works

It is a self-finance scheme towards with the employers as well as the employees make monthly contribution from their wages these contribution are affixed percent of their wages the state government also contribute 1/8th part of the medical expenses

Who has the power to fix the percentage of contribution?

The Government of India devices the percentage from time to time currently the employees contribution rate is 0.75% and employers contribution rate is 3.25 % these are the reduced rate as of 1st July 2019