All About Employee State Insurance

The Employee State Insurance (ESI) is a self-financing social security and health insurance scheme for Indian workers. The scheme is managed by the Employees' State Insurance Corporation (ESIC), which is an autonomous body created by the Government of India under the Ministry of Labour and Employment. The scheme provides medical, disability, maternity, and other benefits to employees and their dependents in case of sickness, maternity, and employment injury.

The Employee State Insurance Act (ESI Act) was enacted in 1948 to regulate the ESI scheme. The Act mandates employers to contribute a certain percentage of their employees' salaries to the scheme, and in turn, provides benefits to the employees and their dependents. The ESI Act covers factories and establishments employing 10 or more persons, and the employee's salary must not exceed Rs. 21,000 per month.

Under the Employee State Insurance (ESI) scheme, it has fixed the contribution rate of the employees at 0.75% of their wages and the employer's contribution at 3.25% of the wages for FY 2023-24.

Hi Sanjay,

You’ve shared a good overview of the Employee State Insurance (ESI) Scheme. Let me add some details and organize the info to give you a complete picture:

Employee State Insurance (ESI) Scheme – Key Points

1. What is ESI?

A social security and health insurance scheme for Indian workers.
Managed by the Employees' State Insurance Corporation (ESIC) under Ministry of Labour & Employment.
Provides medical, disability, maternity, and other benefits to employees and their dependents.

2. Legal Framework

Governed by the Employee State Insurance Act, 1948.
Applies to factories and establishments with 10 or more employees.
Covers employees whose gross monthly wages do not exceed Rs. 21,000.

3. Contributions

Employee contribution: 0.75% of wages (FY 2023-24).
Employer contribution: 3.25% of wages (FY 2023-24).
Wages include basic pay plus allowances but exclude certain payments like bonuses and overtime.

4. Benefits Under ESI Scheme

Medical benefits: Free medical care for employees and their dependents.
Sickness benefit: Cash compensation during sickness period.
Maternity benefit: Paid leave and medical care for maternity.
Disablement benefit: Compensation for temporary or permanent disability due to employment injury.
Dependents’ benefit: Payments to family in case of death due to employment injury.
Funeral expenses: Lump sum amount to the family for funeral costs.

5. Registration and Compliance

Employers must register with ESIC within 15 days of becoming liable.
Regular contribution payments are made monthly to ESIC.
Non-compliance attracts penalties and legal action.

6. Who is covered?

Employees drawing wages up to Rs. 21,000/month (Rs. 25,000 for persons with disability).
The scheme is mandatory for establishments that meet criteria.

Summary Table

Aspect	Details
Applicable establishments	Factories/establishments with ≥ 10 employees
Employee wage limit	Up to Rs. 21,000/month
Employee contribution	0.75% of wages (FY 2023-24)
Employer contribution	3.25% of wages (FY 2023-24)
Benefits	Medical, sickness, maternity, disablement, dependents’ benefits, funeral expenses