Employees State Insurance (ESI) Scheme

Applied to factories and other establishments with 10 or more employed individuals, ESI, in some states, provides cover to establishments with a threshold limit of 20. Under ESI, employees working in factories and establishments like such, drawing wages upto Rs. 15,000 on a monthly basis, are entitled to social security cover as per the ESI Act.

The ESI is managed by Employees' State Insurance Corporation or ESIC.

To avail of multiple benefits offered under Employee State Insurance or ESI, a person should meet certain eligibility criteria set by the ESIC committee. The ESI scheme is applicable to:

• A person who is employed in a non-seasonal factory with more than 10 employees. Please note that this criterion applies under Section 2 (12) of the Act.
• An employee with a wage limit of Rs. 21,000. This criterion was brought into effect from 1 January 2017.

Coverage Under ESI

The ESI ACT, 1948 was originally applicable to non-seasonal factories using power and employing 20 or more persons. Nonetheless, it is now applicable to non-seasonal power using factories with 10 or more employees and non-power using factories with 20 or more employees.

According to Section 1(5) of the Act, the Scheme has been extended to restaurants, shops, hotels, shops, road motor transport undertakings, cinemas, preview theatre, and newspaper establishments that have 20 or more employees.

It must be noted that the existing wage limit for coverage under the Act, is Rs.25,000/- per month for disabled employees and Rs. 21,000 for otherwise.

Under Section 1(3), the ESI Scheme is now notified in 575 Districts in 35 States. Furthermore, in all Union Territories, except Lakshadweep Island. The ESI Scheme is yet to be notified in 161 districts.

Data Source: ESIC Website

Major Benefits of Employee State Insurance

The prime advantages of ESI are massive, both in medical and financial terms. Don’t forget to check the below mentioned key benefits of employee state insurance:

1. Medical Benefits: The medical benefit cover provided by the ESIC comes into effect from the first day of an individual’s employment. This cover provides the individual with the benefit of affordable medical care by handling the medical expenses.
2. Disability Benefit: If an employee is disabled, the ESIC provides them with monthly wages for the period of the injury if the disablement is temporary. The benefit is also provided for the remainder of the employee's life if the disablement is permanent.
3. Maternity Benefit: ESIC takes care of the soon-to-be mothers as well by providing 100% of the average daily wages for a period of to 26 weeks from the time of going into labor. Please note that the benefit is provided for a period of 6 weeks in case of a miscarriage. In case of an adoption, 12 weeks of pay is provided.
4. Sickness Benefit: Sickness benefit is one of the key benefits provided by the ESIC. By means of sickness benefit, the committee makes sure that there is a flow of cash coming into the employee's household at the time of sickness or in other words, during a medical leave. It must be noted that an employee’s 70% of the average daily wages is paid during medical leave for 91 days (maximum period) in two successive benefit periods.
5. Unemployment Allowance: ESI provides an unemployment allowance or a monthly cash allowance (24 months maximum) in case of permanent invalidity owing to non-employment injury or involuntary loss of employment.
6. Dependent's Benefit: ESIC provides monthly payments apportioned among the surviving dependents if the employee meets with an untimely death because of an injury at the place of employment.
7. Other Benefits: Some of the additional benefits included under ESIC include confinement expenses, funeral expenses, skill up-gradation training (as per Rajiv Gandhi Shramik Kalyan Yojana), vocational training, and physical rehabilitation.

ESI Scheme - Do’s and Don'ts

An employee must keep the ESI do’s and don’ts in their mind to ensure that they do not encounter any issues in case of ESIC.

The list of Do’s includes:

• An employee should keep their ‘Pehchan Card’ safe from theft or damage as it is extremely important to avail the benefits.
• In case an employee loses their Pehchan Card, they should report a lost card to their Branch Office or Dispensary without any delay.
• If you as an employee or worker having ESI Registration Number decide to switch your job, informing the new employer about the change would be a must.
• It must be kept in mind that there are specific benefits that are given to the employee on the basis of the length of their contribution in the company. So if you decide to switch your job, register yourself using the same ESIC number so that the related are awarded to you.
• Take referral procedures seriously.
• Follow each and every instruction by the doctor carefully.
• Make sure you get your Form 105 signed by your employer in case you wish to go on an outstation journey. It would be of great help if you decide to avail ESI facilities in another region.

The list of Don’ts includes:

• It is a must for the employee or worker to ensure that any non-eligible individual is not added to the employee's Declaration Form so as to avail medical attention.
• Make sure the Pehchan Card does not get defaced or tampered in any which way.
• Every employee or worker should make sure that they do not lend their Pehchan Card to any person.
• An employee or worker should not fake an injury or illness just to claim ESIC benefits.
• Do not obtain a fake or forged certification from a doctor.
• Do not approach touts for favors.
• As an employee or worker, you should ensure that you do not pay for an ESIC form as you can get them from the Branch Office for free.
• Every employee or worker should add or delete a family member in their declaration if any birth or death takes place in the family.