The Employees’ State Insurance Act, 1948

The Employees’ State Insurance Scheme is an integrated measure of Social Insurance embodied in the Employees’ State Insurance Act. It aims to protect employees, as defined in the Employees’ State Insurance Act, 1948, against the impact of incidences of sickness, maternity, disablement, and death due to employment injury and to provide medical care to the insured persons and their families.

Compliances

Applicability

Type of Establishment

Mandatory for

Factories employing 10 or more persons.
Shops, hotels, restaurants, cinemas, road transport undertakings, newspapers, educational or medical institutions (private or public), and other establishments as notified by the government.

Employee Strength

Threshold - Applicable when the establishment employs 10 or more employees (in some states, the threshold may be 20, depending on state government notification).

Salary Limit

Employees drawing gross wages up to ₹21,000 per month (₹25,000 for persons with disabilities) are mandatorily covered under the ESI scheme.

Contributions

Employer's Contribution: 3.25% of wages
Employee's Contribution: 0.75% of wages
Total Contribution: 4% of gross monthly salary

Note: Employers must deposit both shares with ESIC authorities.

Key Benefits to Employees

Medical care for the insured person and dependents
Sickness benefits (70% of wages during certified sick leave)
Maternity benefits
Disablement and dependent benefits
Funeral expenses
Rehabilitation of disabled workers

Refer here for more information.

Exceptions

Employees with gross monthly salary above ₹21,000 are not covered.
Certain notified establishments/areas may be exempt or brought under the scheme through phased implementation.

Registration Requirements

Registration with ESIC is mandatory within 15 days from the date of applicability.
Online registration through the ESIC portal (https://www.esic.gov.in).