ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation which is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India.
This scheme is started for Indian workers. The workers are provided with a huge variety of medical, monetary and other benefits from the employer.
Applicability of ESI
Any Company having more than 10 employees (in some states it is 20 employees) who have a gross salary of upto Rs. 21000/- (excluding washing allowance and conveyance) has to mandatorily register itself with the ESIC.
Entities covered under ESIC
As per the government notification dated Sec 1(5) of the ESI Act the following
Also covers Entities:
1. Shops
2. Restaurants or Hotels only engaged in sales.
3. Cinemas
4. Road Motor Transport Establishments;
5. Newspaper establishments (which is not covered under the factory act)
6. Private Educational Institutions
Breakup of ESI Contribution:
The employer needs to contribute an amount of 3.25% of the gross monthly salary payable to the employee whereas the employer needs to contribute only 0.75% of his monthly salary every month of the year.
Note: Gross Salary is total salary excluding Conveyance and Washing allowance.
ESI Rules:
ESIC is calculated on Gross salary (Gross Salary is total salary excluding Conveyance and Washing allowance.)
The current maximum ceiling wage for ESIC is Rs.21000/-.
