ESIC: Applicability, Eligibility Criteria & Contribution Rates

Employees’ State Insurance Corporation (ESIC) is a statutory corporate body set up under the ESI Act 1948, which is responsible for the administration of the ESI Scheme. 

The ESI scheme is a self-financed comprehensive social security scheme devised to protect the employees covered under the scheme against financial distress arising out of events of sickness, disablement or death due to employment injuries.

Latest Update
ESIC contribution rates are reduced W.E.F. 1st July 2019, which is at 0.75% of the wages for an employee and 3.25% of the employee's wages for an employer.

What is an ESIC Number?

An ESIC number is a unique identification number associated with an establishment or an employee registered under the Employees' State Insurance Scheme (ESIS). The employer receives a 17-digit ESIC code, while each insured employee is allotted a permanent 10-digit ESIC IP (Insured Person) number.

• The ESIC IP number remains unchanged throughout the employee's working life, even when the employee changes jobs or employers. 
• It serves as a permanent identifier for accessing benefits under the ESI Scheme, including medical treatment, maternity benefits, disability benefits and other social security benefits.
• The ESIC IP number can generally be found on the employee's salary slip or ESIC card. It can also be retrieved through the ESIC Insured Person Portal or UMANG app, or obtained by contacting the employer or HR department.

Note: The 17-digit ESIC number is the employer's registration code, whereas the 10-digit ESIC IP number identifies the insured employee.

Composition of ESIC

The Employees’ State Insurance Corporation (ESIC) is constituted under the Employees’ State Insurance Act, 1948 to administer the ESI Scheme. The Corporation comprises representatives of the Central Government, State Governments, employers, employees, the medical profession and Parliament, along with the Director General as an ex-officio member.

The composition of the ESIC includes:

• A Chairman appointed by the Central Government.
• A Vice-Chairman appointed by the Central Government.
• Up to five persons appointed by the Central Government.
• One representative from each State in which the ESI Act is in force, appointed by the respective State Government.
• One person representing the Union Territories, appointed by the Central Government.
• 10 representatives of employers, appointed by the Central Government in consultation with recognised employers’ organisations.
• 10 representatives of employees, appointed by the Central Government in consultation with recognised employees’ organisations.
• Two representatives of the medical profession, appointed by the Central Government in consultation with recognised medical practitioners’ organisations.
• Three Members of Parliament—two from the Lok Sabha and one from the Rajya Sabha.
• The Director General of ESIC, who serves as an ex-officio member. 

Standing Committee of ESIC

A Standing Committee is constituted from among the members of the Corporation. It functions as the executive body of ESIC and administers the affairs of the Corporation subject to its general superintendence and control. 

The Standing Committee consists of:

• A Chairman appointed by the Central Government.
• Three members appointed by the Central Government.
• Three members representing State Governments, representing the three States specified by the Central Government from time to time.
• Three members representing employers, elected by the Corporation.
• Three members representing employees, elected by the Corporation.
• One member representing the medical profession, elected by the Corporation.
• One member elected by Parliament.
• The Director General of ESIC as an ex-officio member. 

The Standing Committee can exercise the powers and perform the functions of the Corporation, subject to the Corporation's overall control and supervision. 

Director General of ESIC

The Central Government may appoint the Director General in consultation with the Corporation. The Director General serves as the Chief Executive Officer of ESIC and performs the powers and duties prescribed under the ESI Act and applicable regulations. 

Medical Benefit Council

The Central Government constitutes a Medical Benefit Council to advise on matters relating to medical benefits under the ESI Scheme. The Council includes representatives of the Central and State Governments, employers, employees and the medical profession. The Director General of ESIC is the ex-officio Chairman, while the Director General of Health Services is the ex-officio Co-Chairman. 

Applicability of the ESI Scheme

The ESI Scheme generally applies to factories and establishments covered under the ESI Act and extended establishments in notified areas, subject to the applicable employee-count and other conditions. Factories employing 10 or more personsare covered under the Act, while coverage of other establishments depends on the category of establishment and applicable notification.

Employees with monthly wages up to ₹21,000 are generally covered under the ESI Scheme, subject to the applicable provisions. The wage ceiling is ₹25,000 per month for persons with disabilities.

The scheme under the ESI Act also applies to the following: 

• Shops 
• Restaurants 
• Hotels 
• Cinema theatres 
• Road motor transport undertakings 
• Newspaper establishments and undertakings 
• Educational institutions
• Medical institutions 
• Contract and casual employees of Municipal Corporations or Municipal Bodies. 

It also applies to the following establishments under the Central Government employing 20 or more persons engaged in: 

• Insurance business 
• Non-Banking Financial Companies (NBFCs) 
• Airport authorities 
• Port trusts 
• Warehousing establishments

Features of the ESI Scheme

The ESI Scheme provides social security and medical care to insured employees and their families. Its key features include:

• Medical benefit: Provides medical care, medicines, specialist consultation and hospitalisation to insured persons and their families.
• Sickness benefit: Provides cash support during certified periods of sickness.
• Maternity benefit: Provides financial support during maternity-related absence from work.
• Disablement benefit: Provides benefits for temporary or permanent disablement due to employment injury.
• Dependants’ benefit: Provides financial support to eligible dependants when an insured person dies due to an employment injury.
• Funeral expenses: Provides financial assistance towards the funeral expenses of an insured person.
• Other benefits: The scheme also provides rehabilitation and certain unemployment-related benefits.
• Contributory scheme: The scheme is funded through contributions from employers and employees. The current rates are 3.25% for employers and 0.75% for employees.
• Employee contribution exemption: Employees with average daily wages up to ₹176 are exempt from paying the employee’s share of ESI contribution. The employer must continue to pay the employer’s share.

Wages Considered for ESI Contribution

ESI contribution is calculated on wages as defined under the ESI Act. Certain payments are included while calculating ESI wages, while specified payments are excluded.

ESIC Contribution Rates

ESIC contribution rates (Reduced w.e.f. 01/07/2019)

How is ESI Contribution Calculated?

ESI contribution is calculated on the employee's wages. The employee contributes 0.75% of wages, while the employer contributes 3.25%.

For example, if the monthly wages are ₹18,000:

The employer deducts the employee's contribution from wages and deposits both contributions with ESIC within the prescribed time.

Download ESIC e-Pehchan Card

Every insured person registered under the ESI Scheme is provided an e-Pehchan Card. The card contains the insured person's Insurance Number and other details and can be downloaded through the ESIC Insured Person Portal or the UMANG app.

To download the e-Pehchan Card:

• Log in to the ESIC Insured Person Portal.
• Enter your Insurance Number and required login details.
• Open the e-Pehchan Card option.
• View and download the card.
• Print the card and get it countersigned by the employer or designated ESIC official, where required.

The e-Pehchan Card is valid for life. If the card is lost, the insured person can download it again through the IP Portal or contact the employer.

Final Word

The ESI Scheme provides medical care and financial support to insured employees and their families. It covers benefits such as sickness, maternity, disablement and employment injury. Understanding ESI eligibility, contribution rates and benefits helps employees and employers comply with the scheme.

Related Articles
1. ESIC Registration – Process, Benefits, Documents Required
2. ESI Calculation
3. How to Download ESIC Card Online?