Which employees & employers are covered under Employee State Insurance Corporation (ESIC)?

Introduction

The Employee State Insurance Corporation (ESIC) is a social security scheme in India that provides medical and cash benefits to eligible employees and their dependents. The scheme is administered by the government and is mandatory for all employers with 10 or more employees. In this article, we’ll take a closer look at which employees and employers are covered by ESIC, as well as the benefits of the scheme for both employers and employees.

What is Employee State Insurance Corporation?

ESIC is a social security scheme that provides medical and cash benefits to eligible employees and their dependents. The scheme is administered by the Employee State Insurance Corporation, a government body that oversees the implementation of the scheme. It is mandatory for all employers with 10 or more employees, and the employer is required to contribute a percentage of the employee’s salary towards the scheme.

Which Employees are covered under ESIC?

Employees covered under ESIC are:

• Employees earning up to Rs. 21,000 per month are eligible for coverage. It includes both permanent and temporary employees. The salary limit includes basic salary and dearness allowance but excludes other allowances such as house rent allowance or overtime pay.
• Covered employees work in non-seasonal factories, shops, establishments, and mines with 10 or more employees.
• Employees in certain seasonal industries like power loom factories, beedi factories, and cotton ginning factories are covered, regardless of the number of employees.
• Contract employees working with an employer covered by ESIC are also included.
• Contract employees can work through a contractor or an agency.
• ESIC provides social security benefits to covered employees, including medical, sickness, maternity, disability, and dependent benefits.

Which Employers are covered under ESIC?

ESIC is mandatory for certain employers to register and contribute towards the scheme. Employers covered by ESIC include:

1. It is mandatory for all factories employing 10 or more employees.
2. It is mandatory for all shops employing 10 or more employees.
3. It is mandatory for all establishments employing 10 or more employees. This includes hospitals, educational institutions, and hotels.
4. It is mandatory for all mines to employ 10 or more employees.

It is important to note that the number of employees includes both permanent and temporary employees, including those employed on a contract basis.

What are the benefits of ESIC for employers and employees?

ESIC provides numerous benefits to both employers and employees. Here are some of the benefits:

Benefits of ESIC for employees

• ESIC provides a range of medical and cash benefits to eligible employees and their dependents. This includes free medical treatment for employees and their dependents at ESIC hospitals and dispensaries, cash benefits in case of sickness or injury, and maternity benefits for female employees.
• Medical benefits include outpatient services, inpatient services, specialist consultations, and diagnostic tests. Cash benefits include sickness benefits, extended sickness benefits, and disablement benefits. Maternity benefits include paid leave and medical expenses.
• It also provides benefits to employees who suffer from occupational diseases such as silicosis, asbestosis, and pneumoconiosis. In such cases, the employee is entitled to cash benefits and medical treatment.

Benefits of ESIC for Employers

• It provides several benefits for employers as well. By contributing to the scheme, employers can ensure that their employees have access to quality healthcare services, which can improve their overall health and well-being. Additionally, by providing medical and cash benefits to employees, employers can improve employee satisfaction and retention.
• It also reduces the financial burden on employers in case of employee sickness or injury. By providing cash benefits, it reduces the need for employers to provide paid leave or advance payments to employees who are unable to work due to sickness or injury.
• ESIC also provides employers with a tax benefit. Contributions towards the scheme are deductible from taxable income, which can reduce the employer’s tax liability.

Conclusion

ESIC is a social security scheme in India that provides medical and cash benefits to eligible employees and their dependents. While the scheme provides benefits to employees, it also provides several benefits to employers who contribute towards the scheme. By contributing towards the scheme, employers can ensure that their employees have access to quality healthcare services, reduce the financial burden in case of employee sickness or injury, and avail tax benefits.

Suggested Read: How to file Employee’s State Insurance (ESI) Return?