Employees’ State Insurance Corporation (ESIC) is a government-run social security scheme in India aimed at providing benefits to employees in the event of sickness, injury, disability, and maternity. It also covers dependents after an employee’s death. ESIC is governed by the Employees’ State Insurance Act, 1948, and it mandates certain obligations for both employers and employees. Here’s a breakdown of what employers need to know about ESIC:
Applicability of ESIC:
Applicability to Employer: ESIC applies to factories, establishments, and businesses that employ 10 or more employees.
Eligibility to Employees: Employees who earn up to ₹21,000 per month (₹25,000 for employees with disabilities). Are eligible for ESIC benefit.
Registration with ESIC:
Mandatory Registration: If your establishment is covered under the ESIC Act, registration with the Employees’ State Insurance Corporation is mandatory. This must be done within 15 days of the establishment’s applicability.
Contributions:
Employees who earn below ₹21,000 per month (₹25,000 for those with disabilities) must contribute to the ESIC fund at the rate of 0.75% of the gross wages, and
the employer contribution is 3.25% of the gross wages, totaling 4% of the gross wages.
Employer’s Responsibilities:
Deduct Employee Contribution: Employers must deduct the employee’s share of the contribution from their wages and remit the total (employer + employee contributions) to the ESIC within 15 days from the end of the month.
Maintain Records: Employers must maintain accurate records of employees covered under ESIC, including their wage details, contributions, and personal information.
Provide Health and Medical Facilities: Employers must ensure that employees covered under ESIC have access to health and medical services available through ESIC’s network of dispensaries, hospitals, and medical institutions.
Inform Employees About Benefits: It’s essential for employers to communicate the benefits of ESIC to their employees, ensuring they are aware of the medical care, maternity benefits, and other entitlements available.
ESIC Benefits for Employees:
The ESIC provides a variety of benefits to employees:
Sickness Benefit: Employees who are unable to work due to illness can receive medical benefits and cash benefits (up to 91 days per year).
Maternity Benefit: Female employees are entitled to 26 weeks of maternity leave and related medical benefits.
Disability and Injury Benefits: Employees who suffer from work-related injuries or disabilities are entitled to compensation.
Dependent Benefits: If an employee passes away due to work-related causes, the family or dependents are entitled to funeral expenses, family pensions, etc.
Medical Benefits: Medical care is provided to insured employees and their families through ESIC-run medical centers.
Filing and Payment of Contributions:
Employers must file monthly returns with the ESIC, detailing contributions for each employee. The returns must be filed online via the ESIC portal.
Payment Timeline:
Contributions must be paid by the 15th day of every month for the previous month’s dues.
Penalties for Non-Compliance:
Failure to comply with ESIC regulations can lead to:
Penalties: Non-payment or delayed payments of contributions can result in penalties.
Prosecution: Employers who do not register, provide benefits, or fail to make contributions may face criminal charges.
Compensation Liability: If an employee is not covered under ESIC but is entitled to benefits, the employer may be held liable to compensate the employee directly.
