Overview
The Employees' State Insurance (ESI) scheme, managed by the Employees' State Insurance Corporation (ESIC), is a social security and health insurance program for Indian workers. Established under the ESI Act, 1948, the scheme provides medical, cash, maternity, disability, and dependent benefits to insured employees. ESI registration is mandatory for organizations with 10 or more employees (in some states, the threshold is 20) earning a monthly wage of up to ₹21,000.
Overview
The Employees’ State Insurance (ESI) scheme, managed by the Employees’ State Insurance Corporation (ESIC), is a social security and health insurance program for Indian workers. Established under the ESI Act, 1948, the scheme provides medical, cash, maternity, disability, and dependent benefits to insured employees. ESI registration is mandatory for organizations with 10 or more employees (in some states, the threshold is 20) earning a monthly wage of up to ₹21,000.
Benefits
- Medical Benefits: ESI covers medical care for employees and their dependents at ESI dispensaries and hospitals.
- Sickness Benefits: Insured employees receive financial assistance during periods of certified sickness.
- Maternity Benefits: Female employees are entitled to maternity benefits, covering prenatal and postnatal care.
- Disablement Benefits: Financial compensation is provided to employees who suffer temporary or permanent disablement due to work-related injuries.
- Dependents’ Benefits: In case of an employee’s death due to employment-related injury, dependents are entitled to financial support.
- Funeral Expenses: A lump-sum payment is made to the dependents to cover funeral expenses.
- Registration Certificate: Certificate of Incorporation or establishment registration document.
- PAN Card of the Business: PAN card of the business entity.
Proof of Address: Utility bill, lease/rent agreement, or sale deed of business premises. - Bank Details: Bank statement and canceled cheque for the business account.
- Employee Details: List of all employees with details such as date of joining, salary, designation, etc.
- Owner’s ID and Address Proof: ID proof (Aadhaar, passport) and address proof of the proprietor, directors, or partners.
- Digital Signature Certificate (DSC): For online verification and submission.
Monthly Contribution: The employer must deposit ESI contributions by the 15th of the following month. Contributions include 3.25% of wages by the employer and 0.75% by the employee.
Employee Registration: All eligible employees should be registered under ESI, and their individual details should be maintained in the employee records.
Filing of ESI Returns: Employers must file ESI returns biannually (April to September and October to March). Returns should include details of contributions, employee information, and salary details.
Maintenance of Records: Employers must maintain attendance registers, wages registers, Form 6 (for ESI records), and Form 7 (for accident records).
Timely Intimation of Changes: Any changes, such as employee exits, salary revisions, or location changes, should be updated on the ESI portal.
Medical Leave Documentation: In case of sickness benefits, employers must ensure that employees submit valid medical certificates to claim benefits.
Penalties for Non-Compliance
- Interest on Late Payment: Delay in ESI contribution payment attracts an interest charge of 12% per annum.
- Damages for Non-Compliance: Non-compliance with ESI contributions and filings can attract penalties up to 25% of the outstanding amount.
- Prosecution and Legal Action: Persistent non-compliance may lead to prosecution and legal action, including fines and imprisonment for the employer.
- Inspection and Audit: ESIC has the right to inspect and audit employer records, and discrepancies may lead to additional penalties.
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