The Employees’ State Insurance Corporation (ESIC) is a self-financing social security and health insurance scheme for Indian workers.
Employees' State Insurance Corporation (ESIC)
Outline
The Employees’ State Insurance Corporation (ESIC) is a self-financing social security and health insurance scheme for Indian workers. Managed by the Ministry of Labour and Employment, it provides comprehensive benefits to employees and their families.
Key Features of ESIC
1.Medical Benefits – Free comprehensive medical care to insured employees and their dependents.
2.Sickness Benefits – Cash compensation for a specified period in case of sickness, equivalent to 70% of wages.
3.Maternity Benefits – Paid maternity leave for insured women, covering prenatal and postnatal care.
4.Disability Benefits – Monthly payments to employees who suffer from temporary or permanent disablement due to employment injury or occupational hazards.
5.Dependents’ Benefits – Pension to dependents of an employee in case of death due to employment injury or occupational hazards.
6.Funeral Expenses – Lump-sum payment to cover the funeral expenses of a deceased insured person.
7.Rehabilitation Allowance – Financial assistance for vocational rehabilitation of disabled insured persons.
ESIC Registration Process
Steps | Details | |
Application | Submit Form-1 (Employer’s Registration Form) through the ESIC portal. | |
Document Submission | Upload necessary documents such as PAN, address proof, bank details, and employee details. | |
Verification | ESIC officials verify the submitted documents and application. | |
Code Allotment | Upon successful verification, a 17-digit unique identification number is allotted to the employer. | |
Contribution Rates
Contribution Type | Rate |
Employee | 0.75% of wages |
Employer | 3.25% of wages |
Comparison Between ESIC and EPF
Criteria | ESIC | EPF |
Objective | Provide medical and cash benefits to employees. | Provide retirement and insurance benefits to employees. |
Coverage | Employees earning ≤ Rs. 21,000/month. | Employees earning any salary (mandatory for > Rs. 15,000/month). |
Employer Contribution | 3.25% of wages | 12% of Basic + DA |
Employee Contribution | 0.75% of wages | 12% of Basic + DA |
Benefits | Medical care, sickness, maternity, disability, dependents’ benefits. | Provident fund, pension, life insurance, partial withdrawals. |
Administration | Managed by ESIC under Ministry of Labour and Employment. | Managed by EPFO under Ministry of Labour and Employment. |
Compliance Requirements
1.Regular Contribution – Employers must deposit their share along with the employee’s share to the EPF account monthly.
2.Record Maintenance – Maintain records of all employees covered under EPF.
3.Return Filing – File monthly and annual returns detailing contributions and withdrawals.
Penalties for Non-Compliance
Penalties for non-payment of contributions, late payments, and non-maintenance of records can range from fines to imprisonment.
Conclusion
ESIC and EPF are vital components of the social security framework in India, ensuring financial stability and medical care for employees. Employers must comply with these regulations to foster a secure and supportive work environment. Proper understanding and timely compliance with ESIC and EPF regulations can help businesses avoid legal complications and build a positive reputation among their workforce.
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