Employees' State Insurance Scheme (ESIS)

Employees' State Insurance Scheme (ESIS): Comprehensive Guide

The Employees' State Insurance Scheme (ESIS) is a major social security initiative in India. It is designed to provide health and financial protection to workers and their families. Established under the Employees' State Insurance Act of 1948, this scheme aims to safeguard employees from the financial burdens associated with sickness, maternity, disability, and employment-related fatalities. 

However, to get the benefits of this scheme, there are certain eligibility criteria that you must fulfill. Keep reading for an in-depth insight. 

What is ESI?

As the name suggests, the Employee's State Insurance Scheme (ESIS) aims to meet every worker's social security needs. It was launched through the Employee's State Insurance Act in 1948. Any organization, business, factory, or establishment with a minimum of 10 employees can adopt ESI for employees. 

This scheme provides financial coverage for the workers and their dependents' medical and maternity needs.

What are the Benefits of ESI?

Following are the benefits offered by the Employee's State Insurance Scheme:

●   Medical Benefits

Workers enrolled in the ESIC scheme can avail of comprehensive medical coverage from their first employment day. There are 1,450 ESI dispensaries, 151 hospitals, 95-panel clinics, 188 Ayush units, and 42 annexes under the ESIC infrastructure throughout the country. 

Workers with ESIC medical benefits eligibility can access healthcare facilities from any network hospital or clinic at affordable costs.

●  Disability Benefits

If any worker gets disabled temporarily, they can claim 90% of their salary every month under the ESIC scheme until recovery. However, if the worker is permanently disabled, he/she will receive 90% of their monthly wage throughout life to ensure financial stability.

●  Maternity Benefits

Employees can also avail of maternity benefits under the ESI Act. This includes receiving 100% of their daily wages for 26 weeks. However, if the doctor advises the employee to be on extended leave, this facility can be extended by another month. ESIC also provides special benefits for adoption and miscarriage as per their commitment to the welfare of every worker's family.

●  Unemployment Benefits

Workers who lost their jobs for being temporarily or permanently invalid for work due to injury can receive 50% of the average monthly salary for up to 2 years as an ESI claim amount. It ensures that employees are financially secure even when they have lost their jobs and are trying to get another.

●  Dependent Benefits

It offers financial support to the injured worker's family if the worker gets illness or injury at the workplace. The workers' surviving dependents will receive monthly financial aid to meet their economic burden.

●  Sickness Benefits

Workers can avail 70% of their daily salary when they are on medical leave as per sickness benefit under ESI Act. This financial support is provided to the workers for a maximum of 91 days to fulfil their daily needs when recovering from sickness.

●  Old Age Medical Care

Insured workers and their spouses receive annual financial assistance of ₹120 annually to meet their medical expenses after retirement or permanent disability. Thus, ESIC is committed to looking after employees' well-being even when they are not part of employment.

●  Funeral Costs

ESIC provides a funeral cost of ₹15,000 for the insured employee. Dependents of the insured employees or the ones performing their last rites can receive this amount as support during hard times.

●  Vocational and Physical Rehabilitation

Permanently disabled workers can receive vocational rehabilitation training so that they can rejoin work. Moreover, if an employee gets injured during work, they can avail themselves of physical rehabilitation under the ESI scheme as specialized care to support their well-being. 

●  Confinement Costs

If there is confinement in any location and the employees cannot get the required medical care under the ESI scheme, their beneficiaries will receive confinement costs. It also provides coverage for maternity-related expenses.

What are the Features of ESIC?

Here are some of the notable features of Employees' State Insurance Corporation (ESIC):

• ESI provides financial assistance to compensate an employee's wage loss in case of illness, factory accidents, or maternity reasons.
• Insured employees can receive complete attention and medical care while they are restoring their health after an accident or during their inability to work.
• As per the ESI Act of 1948, insured employees can receive benefits in the form of cash during maternity leave, sickness, rehabilitation allowance, funeral, etc. They can also receive non-cash benefits, which include medical care.
• The family members of an injured employee can also receive medical care under the ESI scheme. As per records, the total beneficiaries covered under the ESI scheme was 13.30 crore in 2023.
• ESI funds are contributory and self-financing as both employees and employers contribute a fixed percentage of the salary to build the corpus. The employer pays his own share of contributions and deducts the employees' part from their wages.
• The ESI contribution rate for employees is 0.75% of their wages, and for an employer, it is 3.25% of the paid wages.
• Employees whose daily average wage is ₹176 cannot contribute to the ESI funds. In such cases, the employer contributes on their behalf.
• The employer must deposit the contribution amount within 15 days from the last date of the month the ESI contribution is due. 
• ESI contributions are paid online or through any authorized public sector bank. 

What are the Eligibility Criteria for ESIC Benefits?

The eligibility criteria for ESIC benefits are as follows:

• There is no minimum or maximum age limit for ESI coverage. Any employee can avail of this benefit.
• Workers within the pay scale of ₹21,000 can avail ESIC benefits. For disabled persons, the pay scale is within ₹25,000.
• The employee must be a part of a covered establishment.
• Shops, factories, or other notified organizations with 10 or more employees are eligible for the ESI scheme.

ESI for Employees: Contribution Structure

Find the contribution structure for ESI in the table below:

What Does ESI Cover?

Here are the organizations covered under the ESI scheme:

●  Hotels
●  Restaurants
●  Cinema theatres
●  Shops
●  Educational institutes
●  Businesses transporting goods and passengers by road
●  Newspaper companies and undertakings
●  Medical institutes
●  Casual or contractual employees working in Municipal Bodies or Corporations

The following Central Government establishments with 20 or more employees are also applicable for the ESIC scheme:

✔  NBFCs (Non-Banking Financial Companies)
✔  Airport authorities
✔  Insurance business 
✔  Warehouses
✔  Port trusts

The Employees' State Insurance Scheme plays a vital role in providing social security and health protection for Indian workers and their families. Its comprehensive benefits ensure that employees can access necessary medical care while receiving financial support during challenging times. As awareness grows and administrative processes improve, ESI for employees is expected to bring potential benefits for the workers and their families.