Employees’ State Insurance Corporation (ESIC)

What is Employees’ State Insurance Corporation (ESIC)

• The ESI Act of 1948 established the Employees' State Insurance Corporation ("ESIC") as a statutory corporate entity tasked with overseeing the ESI Scheme's administration.
• The ESI program is a self-funded, all-inclusive social security program designed to shield participating employees from financial hardship in the case of illness, disability, or death from work-related injuries.
• To assist in the execution of the ESI system, the ESIC has 65 regional and sub-regional offices spread throughout several states in addition to its headquarters in New Delhi. Furthermore, the ESIC is advised on the management of medical benefits by the Medical Benefit Council, a specialized entity.

Structure of the ESIC

• Chairman: Appointed by the Central Government, typically a person distinguished in public life.
• Vice-Chairman: Appointed by the Central Government.
• Representatives of the Central Government: Five members, with no more than three being officials.
• Representatives of State Governments: One member from each state government.
• Representatives of Employers: Ten members nominated by the Central Government.
• Representatives of Employees: Ten members nominated by the Central Government.
• Representatives of the Medical Profession: Two members, one of whom must be a woman, nominated by the Central Government.
• Director General: The chief executive officer of the ESIC, appointed by the Central Government.
• Financial Commissioner: Responsible for financial matters, appointed by the Central Government.

The ESIC is responsible for formulating policies for the ESI scheme, monitoring its implementation, and ensuring that the benefits are delivered to the rightful beneficiaries.

Composition of the Standing Committee of ESIC

The Standing Committee functions as the executive arm of the ESIC, managing the day-to-day operations of the Corporation. It ensures that the decisions and policies of the Corporation are properly implemented.

1. Composition of the Standing Committee:

• Chairman: Elected from among the members of the Corporation.
• Representatives of the Central Government: Three members chosen from the Central Government representatives in the Corporation.
• Representatives of State Governments: One member selected from the state government representatives.
• Representatives of Employers: Three members chosen from the employer representatives.
• Representatives of Employees: Three members selected from the employee representatives.
• Representative of the Medical Profession: One member chosen from the medical professionals within the Corporation.
• Director General: An ex-officio member of the Standing Committee.

Who is required to register under ESIC?

ESIC registration is mandatory for:

• Factories and establishments employing 10 or more employees
• Shops, hotels, restaurants, cinemas, and private educational institutions (state-specific applicability)
• Employees earning wages up to ₹21,000 per month (₹25,000 for persons with disability)

 

Benefits of ESIC Registration

For Employees:

• Comprehensive medical care for employee and dependents
• Sickness benefit (cash compensation during illness)
• Maternity benefit for female employees
• Disablement benefit in case of injury
• Dependents’ benefit in case of death due to employment injury

For Employers:

• Statutory compliance under labour laws
• Protection against employee medical claims
• Improved employee welfare and retention
• Avoidance of penalties and legal actions

 

ESIC Contribution Rates

• Employer Contribution: 3.25% of wages
• Employee Contribution: 0.75% of wages

(Rates as prescribed by ESIC and subject to change by the government)

 

ESIC Registration Process

ESIC registration is completed online through the ESIC portal, where the employer submits establishment and employee details along with required documents.

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