ESI: Full Form, Definition, and Features

What is the Full Form of ESI?

The full form of ESI is Employee State Insurance, and it is managed by ESIC.

What is the Definition of ESI?

According to the Employee State Insurance definition, it is a government-supported medical insurance scheme that helps workers and their dependent family members get financial aid for medical treatment & maternity benefits under the Employees’ State Insurance Act of 1948.

What are the Key Features of ESI?

1. The entire contributions towards the ESI scheme are made by the Employer and Employee.
2. Employee State Insurance offers full medical assistance to eligible workers and their family members from day 1 of their work commencement.
3. ESI offers financial assistance in cases of sickness, disablement, maternity, and unemployment.
4. Workers will receive 90% wages in cases of temporary or permanent work injury under ESIC regulations.
5. Family members will receive monthly financial assistance upon the worker’s death.

What are the Eligibility Criteria for ESI?

• Industries and establishments with 10 or more employees must register under the ESI scheme.
• Employees with a gross salary of less than Rs 21000 are eligible for the ESI scheme. For workers with disabilities, the threshold salary is Rs 25000.
• Employment under regular, contractual, and temporary can avail of the ESI scheme.
• Employees earning less than or equal to Rs 176 daily are exempted from paying contributions towards the ESI scheme.

What are the Current Contribution Rates of ESI?

• Employers contribute around 3.25% of the employee’s gross salary.
• Employees contribute 0.75% of their gross salary.

How to Register for the ESI Scheme?

1. Sign Up: Register online on the ESIC portal as a new employer.
2. Verify Email: Receive & use the login credentials sent to your email.
3. Form 1: Log in, fill in the Employer Registration Form-1 accurately, & submit.
4. Pay Initial Contribution: Complete the online payment of the 6-month advance contribution.
5. Get Registration Letter: Receive the official C-11 letter with your 17-digit ESI number.
6. Register Employees: Register all eligible employees individually to issue their unique ESI numbers.

Frequently Asked Questions (FAQS)

1. Is ESI coverage valid if I change jobs/states?

Yes, Employee State Insurance is applicable all over India for benefits.

2. What is the contribution period for the ESI scheme?

There are two six-month contribution periods: April 1 to September 30 & October 1 to March 31.

3. What is the penalty for late payment of ESI contribution?

An employer is liable to pay simple interest at 12% per annum for each day of delay, plus damages.