ESI Registration

Eligibility

• An employee must earn a gross monthly salary of ₹21,000 or less to be eligible for ESI coverage.
• Applies to employees working in certain categories of employment such as factories, establishments, or businesses that employ 10 or more persons. However, this threshold may be lower in some states, such as establishments employing 20 or more employees.
• Employees working in factories and certain types of establishments, such as shops, hotels, restaurants, cinemas, and more, are eligible for ESI coverage if they meet the salary criteria.
• This scheme covers the primary employee and their immediate family members, including spouse and dependent children.
• In some cases, employees earning above the prescribed limit can also opt for voluntary ESI coverage by making a formal request to the Employee’s State Insurance Corporation (ESIC).

Note: Rate of contribution

Employee: 0.75% of the wages payable to them

Employer: 3.25% of the wages payable to employees

Employees, earning up to ₹ 176/- a day as daily wages, are exempted from payment of their share of contribution.

Benefits for Employer

• Helps to take benefits of employment generation subsidy.
• To avoid legal problems.
• Amount contribution under this Act is deductible while computing income under the Income Tax Act.
• Employers covered under the ESI Scheme are exempt from the Maternity Benefit Act and the Employees’ Compensation Act.
• Employers are no longer responsible for providing medical facilities to employees and their dependents. 
• The Central Government pays the employer’s contribution for three years for providing regular employment to people with disabilities.
• Employers have, at their disposal, a productive, well-secured workforce – an essential ingredient for better productivity.

Benefits for Employees

• Provides monthly cash allowance for a duration of maximum 24 months in case of involuntary loss of employment or permanent invalidity due to non-employment injury.
• ESIC provides 100% of average daily wages in cash up to 26 weeks in confinement and 6 week in case of miscarriage, during maternity leave and 12 weeks for commissioning mother and adopting mother.
• ESIC provides reasonable Medical Care for self and family from day one of entering into insurable employment.
• A lump sum payment in case the insured employee or their wife gives birth at a place without the necessary ESI Scheme facilities.
• Monthly payment apportioned among the insured employee’s dependents in case of death due to employment injury

 The dependents of a deceased employee receive Rs. 10,000 as a funeral expense to perform last rites.