• Employee State Insurance Corporation Scheme

    In a time, when the industry was still in its nascent stage, the people of India was still heavily dependent on a large assortment of imported goods and services. These goods and services were provided by either the developed or developing parts of the world. So, India being the self-dependent country it is, started developing the working class sector so ensure that manufacturing and labor jobs remained in the country.

    A workforce was developing in the country, dedicated to ensure that industry in India begins to grow and thrive. To ensure that these workers were protected in terms of health and finances, the Parliament implemented the Employees’ State Insurance Act, 1948 (ESI Act). It was the first major legislation that was meant to garner social security for workers. The ESI Act encompasses health related eventualities which workers are exposed to on a daily basis. This could include any type of sickness, temporary or permanent disability, maternity, diseases contracted from a workplace, death due to employment, and any type of injury that results in the loss of wages or earning capacity. He ESIC Act acts as a financial safety net for workers against these ailments.

    Who are Eligible for ESI?

    To come under the vast umbrella of benefits offered by the Employee State Insurance Corporation (ESIC), an individual should meet certain criteria that has been set by the committee. The ESI scheme is applicable to

    • An individual who is employed in a non-seasonal factory that has more than 10 employees. This criteria applies under Section 2 (12) of the Act.
    • With effect from 1 January 2017, the wage limit of an employee is set at Rs.21,000 per month for him/her to come under the coverage of the ESI scheme.

    ESI Coverage:

    This scheme has also been made extended to hotels, shops, cinemas and preview theatres, restaurants, newspaper establishments, and road-motor transport undertakings. This scheme has also been extended to the Private Educational and Medical institutions that have employed 10 or more people. This is applicable in certain states and union territories only.

    The ESI scheme has been implemented are-wise throughout the country. This scheme has been implemented in stages in every state in India except Arunachal Pradesh and Manipur. The scheme has also been enacted in all union territories except for Daman and Diu, Dadra and Nagar, and Lakshadweep Islands.

    The ESI scheme has been notified in a total of 325 complete districts out of a total of 393 districts. Out of these notified districts, 89 districts implemented the scheme partially.

    Coverage (as on 31 March 2016) Particulars
    No of Employees 1.89 crore
    No. of Insured Person Family Members 2.13 crore
    Total No. of Beneficiaries 8.28 crore
    No. of Employers, etc. 7.83 lakh
    No. of Insured Women 3.78 lakh
    Coverage (as on 31 March 2017) Particulars
    Total No. of Beneficiaries 12.37 crore
    No. of Insured Person Family Members 3.19 crore

    Key Features and Benefits of ESI:

    There are a number of attractive features and benefits that are offered by the Employee State Insurance Corporation. Not only does it provide medical benefits but it also comes with a level of financial security in times of financial hardship like unemployment, etc. Some of these are listed below:

    • Medical Benefits: The Employee State Insurance Corporation takes care of an individual's medical expenses by providing reasonable medical care. This cover comes into effect from day one of the individual's employment.
    • Disability Benefit: In case an employee is disabled, ESIC ensures that the employee is paid their monthly wages for the period of the injury in case of a temporary disablement or for the remainder of the employee's life in case of a permanent disablement.
    • Maternity Benefit: ESIC helps an employee welcome their baby to a household which has been showered with benefits. ESIC provides a total of 100% of the average daily wages for a period of to 26 weeks from the time of going into labor and 6 weeks in case of a miscarriage. 12 weeks of pay is provided in the case of an adoption.
    • Sickness Benefit: ESIC ensures that there is a flow of cash coming into the employee's household during medical leave. 70% of the average daily wages of an employee is paid during medical leave for a maximum period of 91 days in two successive benefit periods.
    • Unemployment Allowance: ESI provides a monthly cash allowance for a maximum period of 24 months in case of permanent invalidity due to a non-employment injury or due to involuntary loss of employment.
    • Dependent's Benefit: In case the employee meets with an untimely death due to an injury at the place of employment, ESIC will provide monthly payments apportioned among the surviving dependents.

    Other benefits that are offered with ESI are:

    • Confinement Expenses
    • Funeral Expenses
    • Physical Rehabilitation
    • Vocational Training
    • Skill Upgradation Training under Rajiv Gandhi Shramik Kalyan Yojana (RGSKY)

    When is ESI registration required?

    When a company employs 10 or more employees, it is mandatory for that company or any other entity to with the ESIC. An employee who earns less than Rs.21,000 per month contributes 1.75% of his/her salary towards the ESI where as the employer pays 4.75% towards the ESI making a total of 6.5%. The company or establishment can apply for an ESI registration within 15 days from the time the ESI Act becomes applicable to that company or establishment.

    Documents Required for ESI Registration:

    The following documents are needed when registering a company or establishment with ESIC:

    • Certificate of Registration (in case of a private limited company) of the company or establishment
    • License or a registration certificate which can be obtained under the Shops and Establishment Act or the Factories Act
    • Certificate of Registration for every entity and for the commencement of production of factories
    • Detailed list of employees along with their monthly compensation
    • List of partners, shareholders, and directors of the company or establishment
    • The company's bank statements along with sufficient evidence about the commencement of operations
    • Address proof and PAN Card of the business establishment or company

    Procedure for ESI Registration:

    An individual should follow the procedure listed below to initiate the ESI Registration of a company or establishment:

    • The company can apply for ESI registration by duly filling up and submitting the Employer's Registration Form (Form-1).
    • The employee can also access the PDF format of the form that is available on the website. Dully fill up the form and submit the same to ESIC on the official website.
    • Once the application and documents have been verified, a 17 digit registration number will be provided to the organisation. Once the company or organisation has received their 17 digit number, they can file their ESI filings.
    • Employees who are registered under the ESI scheme will receive an ESI card after they have submitted a form along with their photographs as well as details about their family members.
    • Any new changes like the additions of employees, etc. will have to be intimated to the ESI.

    Documents required for ESI Returns are listed below:

    • Register for Form 6
    • Attendance register
    • Inspection book
    • Register of wages
    • Register of any accidents on the premises
    • Returns and monthly challans submitted for ESI

    Employees' State Insurance Act, 1948:

    The Employees' State Insurance is a social security scheme that is aimed at delivering medical care and other benefits available to the employees and workers employed in factories, organisations, and other establishments. The ESI scheme works as a medical insurance plan for a worker/employee and their family members. There are a large number of ESI hospitals, specialist centers, dispensaries, and clinics that provide the state of the art medical care to those who come under the ESI Act. Apart from medical benefits, the employee or worker will be entitled to financial benefits as well.

    Do's and Don’ts of ESI Scheme:

    There are certain things that an employee has to follow to ensure that their run in the ESIC family goes smoothly.

    Some of the things to keep in mind are:

    • Pehchan Card acts as an employee's visa to their social security so it should be protected from theft or damage.
    • An individual should ensure that they report a lost card to their Branch Office or Dispensary immediately.
    • If an employee or worker who has an ESI Registration Number switches jobs, they should inform the new employer of the same.
    • There are certain benefits which are provided based on the length of their contribution. So if the employee or worker switches jobs and registers themselves using the same ESIC number, the benefits which are related will be awarded to the employee.
    • Referral procedures should be taken seriously.
    • Follow the doctor’s instructions carefully.
    • The employee or worker should ensure that they get their Form 105 signed by their employer in case the employee wishes to go on an outstation journey. This helps in case the employee or worker needs to avail ESI facilities in another region.

    Ensure that you do not make these mistakes:

    • The employee or worker should ensure that a non-eligible individual is not added to the employee's Declaration Form for the purpose of availing medical attention.
    • It is important that the Pehchan Card is not defaced or tampered with in any way.
    • The employee or worker should ensure that they do not lend their Pehchan Card to anyone.
    • The employee or worker should not fake an injury or illness for the sole purpose of claiming benefits.
    • Do not procure a fake or forged certification from a doctor.
    • Touts should never be approached for favors.
    • The employee or worker should ensure that they do not pay for an ESIC form as these are supplied for free at the Branch Office.
    • The employee or worker should add or delete a family member in their declaration in case of a birth or death in the family respectively.

    Redressal of Public Grievances:

    A Public Grievances Redressal System has been set up by the ESI Corporation to aid in clearing out any queries or issues that an employee might have. The following helplines have been set up to cater to the workers and employees under the ESI scheme. The numbers are toll-free and can be contacted at any time of the day.

    Name of the Region Toll-Free Helpline
    Andhra Pradesh RO*, Hyderabad 1800-425-2358
    Bihar RO, Patna 1800-345-6190
    Assam RO, Guwahati 1800-345-3627
    Goa RO, Panji 1800-233-0132
    Chhattisgarh RO, Raipur 1800-233-5172
    Gujarat RO, Ahmedabad 1800-233-0424
    Haryana RO, Faridabad RO, Faridabad 1800-180-1475
    SRO, Gurgaon 1800-180-2526
    Jammu & Kashmir RO, Jammu 1800-180-7029
    Himachal Pradesh RO, Baddi 1800-180-2862
    Odisha RO, Bhubaneswar 1800-345-6712
    Jharkhand RO, Ranchi 1800-345-6532
    Madhya Pradesh RO, Indore 1800-233-4414
    Tamil Nadu RO, Chennai 1800-425-7080
    SRO, Madurai 1800-425-2527
    SRO Tirunelveli 1800-425-1505
    Uttarakhand RO, Dehradun 1800-180-4161
    Uttar Pradesh RO, Kanpur RO, Kanpur 1800-180-5127
    SRO, Noida 1800-180-3181
    Maharashtra RO, Mumbai RO, Mumbai 1800-209-4599
    SRO, Pune 1800-233-4143
    Puducherry RO, Puducherry 1800-425-7642
    Punjab SRO, Ludhiana 1800-180-0026
    West Bengal RO, Kolkata 1800-345-4454
    SRO, Barrackpore 1800-345-5985
    Karnataka RO, Bangalore 1800-425-0636
    SRO, Hubli 1800-425-0037
    Rajasthan RO, Jaipur 1800-180-6266
    RO, Udaipur 1800-180-6224

    *Note: RO-Regional Office, SRO-Sub-Regional Office

    An employee or worker can even contact the ESI Corporation by sending a mail to the following address:

    • ESI Corporation,

    Panchdeep Bhawan,

    CIG Marg,

    New Delhi-110002

    Website: www.esic.nic.in, www.esic.in

    E-mail: jd-pghq@esic.in

    Phone: 011-23234092/93/98

    Fax: 011-23234537

    Toll Free Helpline No.: 1800-11-2526

    FAQs:

    1. What is the procedure for the registration of an employer?
    2. When an individual joins the company or organization, the employee is mandated to provide their family details along with valid photographs to the employer so that the employer can register the employee and his/her family members online. Once the registration process is completed, a 17 digit employee number will be provided which has to be used throughout the lifetime of the insured. This number should be consistently used even if the employee changes his/her place of employment.

    3. Is it mandatory for employers to register under the ESI?
    4. Yes. It is mandatory that an employer who falls within the eligibility bracket of the ESI scheme to register themselves under the ESI scheme under Section 2-A of the Employees’ State Insurance Act, 1948 (ESI Act). The factory, company or establishment should be registered with the ESIC within 15 days from the time the organization is cleared for registration.

    5. What are compliance requirements?
      • An individual who is employed in a non-seasonal factory that has more than 10 employees. This criteria applies under Section 2 (12) of the Act.
      • With effect from 1 January 2017, the wage limit of an employee is set at Rs.21,000 per month for him/her to come under the coverage of the ESI scheme.
    6. Are the benefits that are granted to the insured employees transferable?
    7. In case of the untimely death of the insured employee due to an injury or disease contracted from the work environment, the benefit that the employee is entitled too is passed on to the insured’s dependents.

    8. What is the ESI Code number?
    9. An ESI Code number is a unique 17-digit identification number that is allotted to every employee of a factory or organization that is registered under the coverage of the Act. This 17 digit number is generated using the ESIC portal after the employer has submitted their employee’s information.

    10. Is it possible for an establishment or factory which was once covered go out of coverage if the number of persons employed by them falls below the minimum limit prescribed?
    11. Once a company, factory or organization comes under the coverage of the Act, it reaps the benefits of the Act for life. The company or organization does not fall out of coverage if the number of employees reduce or any other reason.

    12. If wages of an employee exceeds Rs.21,000 in a month, will he/she be covered and the deduction of the contribution from his wages be stopped?
    13. If the wages of an employee exceed Rs.21,000 in a month, then he/she will be covered till the end of the contribution period. Contribution shall be deducted and paid depending on the total wages that have been earned by the employee.

    14. Is the over-time done by the employee included for the wage ceiling limit for coverage?
    15. Overtime has been excluded from being considered when calculating the wages of an employee. Overtime is not a continuous mode of earning money. If overtime is considered, the employee will float in and out of the coverage limit and this will deprive the employee of any benefits that they might be eligible for.

    16. What is the time limit for the payment of contribution?
    17. Any and all contributions should be made within 21 days from the last day of the month.

    18. What is mode of payment of the contributions?
    19. The employer of a company or organization will have to file their monthly contributions on the official ESIC portal and this should be done every month. Contributions can also be made through net banking.

    20. Is there any interest on the delayed payment?
    21. An individual who fails to make a pay their contribution in the given time period will have to pay an interest of 12% per annum for each day that the individual has defaulted on their payment.

    22. What are the records that are to be maintained for the purpose of the ESI scheme?
    23. Along with an employee’s wage record, muster roll, and books of accounts, the employer will have to maintain the following as well:

      • An inspection book
      • Accident register in Form 11
      • Employer will have to maintain an employee’s register
    24. What is the scale of the Medical Benefit?
    25. Full range surgical, medical, and obstetric treatment which consists of out-door treatment, supply of all dressings and drugs, in-patient treatment, radiological and pathological investigations, pre and post-natal care, ambulance services, super specialty consultation and treatment, provision of artificial appliances, etc.

    26. What is an identity card?
    27. Once registered under the scheme, the employer will have to print out the temporary identity certificate and affix a valid photograph that has been provided by the employee. The employer will have to authenticate the same.

    28. What is the Rajiv Gandhi Shramik Kalyan Yojana?
    29. The Rajiv Gandhi Shramik Kalyan Yojana scheme acts as a safety net for an insured individual. If the factory or establishment where the insured works is closed for any particular reason, the insured will be entitled to an unemployment allowance that is paid every month. This is applicable if the individual has been insured for at least 3 years of unemployment. This scheme also covers the insured in case of an injury that leads to the insured's unemployment.

    30. What are the benefits that the family members of the insured are entitled to?
    31. The benefits that are made available to the family members of the insured are:

      • Family members of the insured can avail medical care whenever needed.
      • This medical benefit will be available for the insured's family members even during the insured's period of unemployment where he/she receives unemployment allowance.
      • Family members will also be entitled to prosthetics like artificial limbs, and artificial appliances as part of their medical treatment.
      • The family of the insured can have funeral expenses of the deceased employee reimbursed to them.
      • Any and all benefits will be paid to the nominee at the time of the insured's death.
      • If the insured employee meets with an untimely death due to a work related injury, the insured's widow/widower, and children will be entitled to the insured's benefits.
    32. What are the establishments that are covered under ESI?
    33. As per the notification that has been issued by the Government (Central/State) that is concerned under Section 1(5) of the ESI Act, establishments that employ 10 or more individuals will come under the umbrella of benefits offered by the ESI scheme. There are some states in India where the ESI coverage is granted to organisations that employ 20 or more employees.

      • Restaurants and hotels that are not involved with manufacturing but are only actively engaged in sales
      • Shops
      • News paper establishments (should not be covered under Section 2(21) as a factory)
      • Road Motor Transport Establishments
      • Movie theaters including preview theaters
      • Private educational institutions that are run by trustees, individuals, societies or any other type of organization
      • Private medical institutions that are run by joint sector, corporates, charitable trusts, private ownership hospitals, diagnostic centers, nursing homes, pathological labs, etc.
    34. Who are the individuals who are termed as principal employers?
    35. If the individual is employed in a factory:

      • Occupier
      • Owner
      • Legal representative of the deceased occupier or owner
      • Managing agent of the occupier or owner
      • Manager of the factory

      ln case the organisation, factory or establishment is under the control of the Government of India:

      • Head of the Department
      • The Specified Authority

      In the case of other organisations or establishments, individuals who are responsible for the control and supervision of the establishment.

    36. Who are the individuals to be covered as “Employees”?
      • If the individual is an employee who is employed directly by the employer or is employed in any department of the factory or establishment, in administration, sales, distribution, etc. of products of the establishment or factory.
      • Employed within the premises for work that needs to be done in the establishment or factory.
      • By employees of the immediate employer
      • Employed outside the premises for work that needs to be done in the establishment or factory under the supervision of a principal employer.
      • Employed by the directors of the company
      • Employees who are lent for hire to the principal employer at the establishment or factory.
    37. What is the maximum time limit for the payment of a benefit or contribution?
    38. Any contribution or benefit shall be paid by the bank to the employee after his/her case has been analysed and approved. This payment should be made within 21 days from the last day of the month when the contribution should be made for any given wage period.

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