What is ESIC?

ESIC stands for Employees’ State Insurance Corporation, a statutory body registered under the Employees’ State Insurance Act, 1948. ESIC is an insurance scheme that covers employees who earn wages upto Rs.21000 per month and work in factories, hotels, shops, restaurants, road transport, cinemas, newspapers, educational institutions and private institutions. It also covers trainees and apprentices employed under certain conditions.

What is the Eligibility for ESIC Registration?

Any non-seasonal factory or establishment having more than 10 employees (in some states, this threshold is 20 employees) who have a maximum basic salary upto Rs.21,000 per month (Rs.25,000 per month for persons with disability) can be covered under the ESIC scheme. Therefore, they have to mandatorily register with ESIC within 15 days from the applicability date.

Under this scheme, the employer contributes 3.25% of the monthly wage payable whereas, the employee contributes 0.75% of the monthly wage. However, employees having a daily wage of less than Rs.176 per day, are not required to provide their contributions.

What are the Benefits of ESIC Registration?

Registering under ESIC has various benefits. Some of them are listed below –

• Sickness benefit – These benefits are provided @70% of total wages for a maximum period of 91 days in an year in the case of a certified illness.
• Extended Sickness – Provides benefits upto 2 years to the employees in case of malignant or long-term diseases @80% of wages.
• Enhanced Sickness benefits – Provides benefits equal to full wages for employees undergoing sterlization for family planning upto 7 days for vasectomy and 14 days days for Tubectomy.
• Medical Benefits to an Employee – It provides medical benefits to the employee and his/her family members.
• Medical Benefits to Retired Employees – It provides medical benefits to retired employees and their spouses upon making a payment of of an annual premium of Rs.120.
• Maternity Benefit – It provides manternity benefit at full rate to the pregnant women (which includes 26 weeks of paid leave that can be extended by 1 month).
• Dependant Benefit – If the death of an employee takes place due to an injury during employment or occupational hazards, a benefit of 90% of the wages is given to his/her dependants after the employees’ death.
• Temporary Disablement Benefits – Benefit upto 90% of wages in case of employment injury is provided till the time the disability continues.
• Permanent Disablement Benefits – Benefits upto 90% of wages is provided every month depending on the extent of loss of earning capacity certified by a medical board.
• Funeral Expenses – Rs.15,000 is given to the dependants of the employees or the person who does the employee’s last rites.

Contact Sahyog Tax & Finance Advisory Ltd. to  assist to streamline the PF registration & compliances