What is Employee’s State Insurance Corporation (ESIC)?
Employee’s State Insurance Corporation, ESIC, is a statutory corporate body that is set up under the ESI Act 1948, which is responsible for the management of the ESI Scheme.
It is a scheme that provides insurance cover to employees for their social, medical, or economic problems.
Applicability Criteria for ESI Scheme
- The ESI Scheme applies to all factories and other businesses with 10 or more employees employed with such organizations.
- The maximum salary of the employee should be 21,000 per month to be applicable for the ESI Scheme.
The ESIC Act, 1948 has set the employer and the employee contribution percentage for ESI Calculation. The contribution percentage of the employer is 3.25% of the wages and that of the employee is 0.75% of the wages.
The employee state insurance is calculated on total earnings every month.
ESIC = Basic Pay + Allowances (DA, HRA, Medical, City Compensatory Allowances, etc.)
Benefits of ESI
- Medical Benefits to the employee and their family members
- Sickness benefits the employees having any certified illness. 70% of their wages are paid during the sickness period which lasts for a maximum of 90 days in a year.
- Maternity benefits are offered to pregnant women in the form of paid leaves.
- In case of the death of an employee, 90% of their salary is paid to their dependents every month after the employee’s death.
- In case of disablement due to an employment injury, the employee can avail of the disablement benefit. In case of temporary disablement, 90% of the salary is paid every month. And in the case of permanent disablement, the amount depends on the extent of the injury.
- Other benefits include funeral expenses, vocational or physical rehabilitation, and old-age medical care.
Also, See: EPFO