“Employee’s State Insurance Corporation”

Key Features of Employee’s State Insurance Corporation

Employee’s State Insurance Corporation (ESIC) is a one-stop solution designed for the benefit of employees in India. It was launched by the Ministry of Labour and Employment, Government of India, in 1948 to reduce the financial and social burden of employees in case of sickness, disability, injury, or death due to employment.

ESIC provides a wide range of services like cash benefits, medical benefits, and unemployment allowance, to name a few. It also provides financial and educational assistance to the dependents of employees in case of death or disablement.
The key features of ESIC are as follows:

• Contributions: ESIC is financed by contributions paid by employers and employees. The rate of contribution for employers is 4.75% of the wages notified by the Government, while the employees’ contribution is 1.75% of the wages.
• Eligibility: Employees with wages of up to Rs 21,000 or an annual salary of Rs 1.5 lacs are eligible for ESIC coverage.
• Enrollment: Employees need to get enrolled in the program by submitting their identity and demographics to the ESIC office.
• Benefits: Employees enrolled in this scheme are entitled to a wide range of benefits like compensation on account of maternity, sickness, disability, injury, or death due to employment, medical benefits, and maternity benefits as well.
• Compulsory Coverage: As per law, employers are required to contribute to the state insurance scheme if 20 or more employees are hired at a workplace.

Benefits and Services of Employee’s State Insurance Corporation

The benefits and services of the ESIC plan may vary depending on the contribution rate and the number of employees enrolled, but still they are all beneficial for employees. They include:

• Cash Benefits: The cash benefits of the ESIC scheme enable employees to continue their employment even during periods such as illness, maternity, injury, or disability.
• Medical Benefits: Employees of all members enrolled in the plan are eligible for free medical facilities including consultations, hospitalization, surgery, and medicines.
• Survival Benefit: The scheme provides financial assistance to the dependent members of an employee in case of death. The sum assured also covers the employee’s funeral expenses.
• Educational Benefits: ESIC provides educational assistance to the children of the members enrolled in the scheme. Educational concessions are also available to children of deceased or disabled members.
• Unemployment Allowance: The ESIC scheme also provides unemployment allowance to its members. This allowance may be used by employees to support themselves during periods of unemployment.

What are the Compliance and Penalties?

Employers are required to comply with the regulations set by ESIC. Non-compliance of the same may lead to strict penalties and fines. Common penalties for non-compliance are imprisonment and/or fine for each month of non-payment, cancellation of ESIC certification for a period of time, etc.

FAQs

What is the purpose of the Employee’s State Insurance Corporation?

The main purpose of the Employee’s State Insurance Corporation is to provide financial and medical benefits to the employees who are enrollees of the scheme, in cases like sickness, disability, injury, or death due to employment.

How do employees and employers contribute to ESIC?

Employees and employers contribute to ESIC by paying a mandatory contribution which is 4.75% of the wages for the employers and 1.75% for the employees.

What types of benefits are covered under ESIC?

The types of benefits covered under ESIC include cash benefits, medical benefits, funeral expense allowance, unemployment allowance, and educational assistance.

To Read More: Employee State Insurance(ESI)