The fund is managed by the Employees State Insurance Corporation (ESIC) according to rules and regulations stipulated in the ESI Act 1948. ESIC is a Statutory and Autonomous Body and the Administrative Ministry is the Ministry of Labour and Employment, Government of India.
This scheme is started for Indian workers. The workers are provided with a huge variety of medical, monetary, and other benefits from the employer. Any Company having more than 10 employees (in some states it is 20 employees) who have a maximum salary of Rs. 15000/- has to mandatorily register itself with the Employees State Insurance Corporation (ESIC).
Under this scheme, the employer needs to contribute an amount of 4.00% of the total monthly salary payable to the employee whereas the employer needs to contribute only 1.00% of his monthly salary every month of the year. The only exemption to the employee in paying his contribution is whose salary is less than Rs. 100/- per day.
The Employees State Insurance Corporation (ESIC) scheme applies to the following As per the government notification dated Sec 1(5) of the ESI Act. :
Under Section 2(12), the Act is applicable to non-seasonal factories employing 10 or more persons.
Under Section 1(5) of the Act, the Scheme has been extended to:
Further, under Section 1(5) of the Act, the Scheme has been extended to Private Medical Institutions, Educational institutions and to contract and casual employees of Municipal corporations/Municipal Bodies employing 10* or more persons in certain States/UTs.
The existing wage limit for coverage under the Act effective from 01/01/2017 is Rs.21,000/- per month [Rs. 25,000/- per month in the case of persons with a disability].
*Note: However the threshold for Coverage of establishments is still 20 Employees in Maharashtra.
The documents required for the registration are –
After collecting all the above-mentioned documents the following procedure is to be followed for the registration of the ESI:
After verification of the form, the government will issue a 17 digit unique number after this the employee will provide to his employee the duly filled form as a part of the registration process and will get an ESI Card after registration.
The half-yearly return of ESIC for the period April to September is due by 12 November, and October to March is due by 12 May.
Amount deducted from employee’s wages as an employee contribution is deemed to have been entrusted to the employer. Therefore the employer has a higher responsibility to deposit the contribution with ESI.
Non-payment or delayed payment of the Employee’s contribution deducted from the wages of the employee amounts to ‘Criminal Breach of trust’ is punishable under IPC Section(s) 406, 409 and also an offense u/s 85 (b – g) of ESI Act. Non-payments, delayed payments, or falsifying payments under Employees State Insurance (ESI) Act may attract imprisonment for a period extending up to 2 years and a fine up to Rs 5,000.
An employer who fails to pay the contribution within the limit specified in the regulation shall be liable to pay simple interest at the rate of 12% per annum in respect of each day of delay or default in payment of contribution.
The above-mentioned compliance and penal provisions are just brief in nature with respect to Employee state insurance schemes, to avoid such non-compliances one needs to take professional help who would help the organization not only in understanding the requirements but also will guard the organization from heavy penalties and prosecutions.