EMPLOYEES STATE INSURANCE ACT (ESIC)

ESIC was the first major legislation on social security in independent India to provide certain benefits to the employees in case of sickness, maternity and employment injury. This scheme is started for Indian workers. The ESIC scheme is applicable to all factories and other establishments as defined in the act with 10 or more persons employed in such establishment and monthly wage does not exceed from Rs 21000.(in some states it is 20 employees).Once applicable forever applicable.

ENTITIES COVERED UNDER ESIC

As per government notification sec1 (5) of the ESI act the following entities are covered:

  1. Shops
  2. Restaurants or hotels not having any manufacturing activity, but only providing services.
  3. Cinemas
  4. Road motor transport establishments
  5. Newspaper establishments
  6. Private educational institutions and medical institutions.

BENEFITS OF ESIC

  1. Periodical payments in case of Sickness certified by medical practitioner.
  2. Medical benefits to an employee and his family members.
  3. Maternity benefit to the woman who are pregnant.
  4. Periodical payment to an insured person suffering from disablement as a result of employment injury.
  5. Payment of funeral expenses on the death of insured person at the prescribed rate.

                      All these facilities are not transferable and assignable. Both sickness and maternity benefits are not allowed at the same time.

DOCUMENTS REQUIRED FOR ESI REGISTRATION

  1. Address of company like electricity bill, telephone bill, water connection bill (any one)
  2. Head office and branch details with address.
  3. Activity of the business – manufacturing /production /service.
  4. Status of the company whether it is private firm / public company/ partnership firm or society etc.
  5. MOA and AOA/Partnership deed/trust deed depending on the entity that is applying for registration.
  6. Owner details, contact no. , email, designation, address of directors /partners.
  7. Company PAN Details.
  8. Number of employees, month wise employment position, salary etc.
  9. Setup proof-sales invoice /incorporation certificate.
  10. Copy of latest bank statements.
  11. Details of bank account along with cancelled cheque.

 Yes, it is the statutory responsibility of the employer. Any factory/establishment registers under the ESI scheme within 15 days from the date of its applicability.

The ESI scheme is self-financing scheme. Both employers and employee monthly contribute a fixed percentage of wages. The state governments also contribute its share to meet medical expenses.