ESIC Rules — Employer's Guide to the ESI Scheme

What is ESI?

The Employees' State Insurance scheme provides medical care and cash benefits to insured persons and their dependants. It is funded by contributions from both the employer and the employee, and administered through ESIC dispensaries, hospitals and empanelled facilities.

• Medical benefit for the insured person and family
• Sickness and extended sickness benefit
• Maternity benefit
• Disablement and dependants' benefit
• Funeral expenses and rehabilitation support

Which establishments are covered?

• Factories employing 10 or more persons, and other establishments notified by the appropriate government.
• Shops, hotels, restaurants, cinemas, road transport and newspaper establishments in notified areas, generally at 10 or more employees (20 in a few states).
• Coverage applies only in areas where the scheme has been implemented and facilities notified.

Applicability thresholds and notified areas vary by state. Confirm the position for your district before concluding that ESI does not apply.

Employer obligations under ESI

• Register the establishment and obtain a 17-digit employer code.
• Register each covered employee and obtain an insurance number and e-Pehchan card.
• Deduct the employee share, add the employer share and pay monthly.
• File the monthly contribution return online.
• Maintain the accident register and report employment injuries.
• Preserve wage and attendance records for inspection.

Frequently asked questions

Is ESI applicable to all employees?

Only to employees drawing wages within the notified wage limit in a covered establishment. Employees above the limit are out of coverage from the start of the next contribution period.

Are contract workers covered under ESI?

Yes, and the principal employer is responsible for ensuring contribution is paid for workers engaged through contractors at its premises.

Sources & references

• ESIC — Employees' State Insurance Corporation
• Employees' State Insurance Act, 1948 (India Code)