The scheme provides full medical care to the employee registered under the ESI Act, 1948 during the period of his incapacity, restoration of his health and working capacity. It provides financial assistance to compensate the loss of his/ her wages during the period of his abstention from work due to sickness, maternity and employment injury. The scheme provides medical care to his/her family members also.

The ESI Scheme is administered by a statutory corporate body called the Employees' State Insurance Corporation (ESIC), which has members representing Employers, Employees, the Central Government, State Government, Medical Profession and the Hon’ble Members of Parliament.

Director General is the Chief Executive Officer of the Corporation and is also an ex-officio member of the Corporation.

At the National level, the Standing Committee (a representative body of the Corporation) for administering the affairs of the Corporation, and the Medical Benefit Council, a specialized body that advises the Corporation on administration of Medical Benefit, are functioning.

At the Regional Level, the Regional Boards and Local Committees have been constituted to review the functioning of the scheme and make suggestions for its improvement. In addition to above, Hospital Development Committees have been set up for improvement of hospital and State Executive Committee for monitoring the performance of ESIS Hospitals and Dispensaries in a given State/UT.

The ESI scheme is a self financing scheme. The ESI funds are primarily built out of contribution from employers and employees payable monthly at a fixed percentage of wages paid. The State Governments also bear 1/8th share of the cost of Medical Benefit.

ESI Scheme is implemented in phases in different part of the country through Gazette notification after making the infrastructure available towards dispensation of medical as well as other benefits provided under the provisions of the Act to the prospective beneficiaries.

In an area notified u/s 1(3) by Central Govt. all factories where 10 or more persons are employed attract coverage under Section2(12) of ESI Act. Further, according to the notification issued by the appropriate Government (Central/State) under Section 1(5) of the Act, the following establishments employing 10 or more persons attract ESI coverage.

1. Shops
2. Hotels or restaurants not having any manufacturing activity, but only engaged in 'sales'.
3. Cinemas including preview theaters;
4. Road Motor Transport Establishments;
5. News paperestablishments.(that is not covered as factory under Sec.2(12));
6. Private Educational Institutions (those run by individuals, trustees, societies or other organizations and Medical Institutions (including Corporate, Joint Sector, trust, charitable, and private ownership hospitals, nursing homes, diagnostic centers, pathological labs).

In some states coverage is still for 20 or more persons employed under sec 1(5). A few State Governments have not extended scheme to Medical & Educational Institutions.

Registration is the process, by which every factory/ establishment, to which the Act applies, gets itself registered online for compliance. Otherwise when a factory/ establishment is identified by ESIC, it is asked to get itself registered under the Act.

Yes, it is the statutory responsibility of the employer under Section 2A of the Act read with Regulation 10-B, to register their Factory/ Establishment under the ESI Act within 15 days from the date of its applicability to them.

The Factory or Establishment to which the Act applies is to be registered by logging into ESIC Portal i.e. www.esic.in within 15 days from the date of its applicability to them The employer is supposed to sign up, providing factory/Establishment name, Address Principal employer’s name, Bank Account, PAN, use of power in case of offactory ,State and region as well as e mail address. The employer trying to register would get a user ID and a password through his mail ID. The employer can log in to www.esic.in . His mail ID can also be used as user ID and the password received has to be accessed from the mail box can be used to register his unit by providing information in the Portal. Automatically a 17 digit code number is generated after successful registration.

It is a 17 digit unique identification number allotted to each of the factory/establishment registered under the provisions of the Act. Such a number is generated through ESIC portal on submission of the pertinent information by the employer. It can also be generated on receipt of Survey Report from the Social Security Officer.

This is also a unique identification number allotted to a sub-unit, branch office, sales office or Registered Office of a covered factory or establishment located in the same State or different State. The employer can register any Branch or Sales Office through ESIC Portal using his credentials and his unique primary registration code number.

Once a factory or an Establishment is covered under the Act, it continues to be covered notwithstanding the fact that the number of persons/ coverable employees employed therein at any time falls below the required limit or there is a change in the manufacturing activity.

Yes, of course the exemption is permissible from operation of provisions of the Act subject to the condition that the employees in a covered factory or establishment are other-wise in receipt of benefits substantially similar or superior to those provided under the ESI Act.

The appropriate Government may grant exemption to such factory or establishment for a period of one year at a time prospectively in consultation with ESI Corporation. An exempted application unit has to apply for renewal three months before the date of expiry of the prior exemption.

If the wages of an employee (excluding remuneration for overtime work) exceeds the wage limit prescribed by the Central Government after start of contribution period, he continues to be an employee till the end of that contribution period and the contribution is to be deducted and paid on the total wages earned by him.

In case the wages of an employee is increased from a retrospective date resulting in crossing the wage limit prescribed, its effect on coverage of that employee is only after expiry of the Contribution period during the currency of which such increase is announced or declared. The contribution on enhanced wages is also payable from the month in which such increase is announced. There is no need to pay the contribution on the arrears for the period prior to the month of declaration/ announcement/ agreement.

An employee who crosses the prescribed ceiling limit in any month at any time after commencement of the contribution period, he/she would continue to be an employee till the end of that contribution period. The Rule position in this regard is mentioned as under:-

“As per Rule-50 of the Employee's State Insurance (Central) Rule 1950 any employee whose wages (excluding remuneration for overtime work) exceed (fifteen thousand) rupees a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.”

Overtime is not a regular and continuous payment, but it is of an occasional nature. If overtime is also taken for wage limit for coverage of an employee, he may be going out of coverage for some time and again coming within the ambit of the scheme, when overtime is not there. However, it is included for payment of contribution to cover the risk during the period he was on overtime work, and to enable him to draw cash benefits at an enhanced rate also.

With effect from 1-4-2008, the wage ceiling limit for coverage of employees with disability (PWDs) had been raised to rupees twenty five thousand a month. To encourage the employers to employ more employees with disability there is no wage ceiling for availing the ESI benefits w.e.f. 01.04.2016. The employer is exempted from payment of Employer's share of contribution on the wages paid to the employees with disability for a maximum period of 10 years from the date of commencement of the contribution period in which such employee with disability is employed. The Ministry of Social Justice & Empowerment, GOI, shall reimburse this Employer's contribution to the ESI Corporation.

Contribution shall be paid in respect of an employee in a bank duly authorized by the Corporation within 15 days of the last day of the calender month in which the contribution falls due for any wage period (Reg. 29 & 31).

The employer needs to file monthly contributions online through ESIC portal on a monthly basis in respect of all its employees after duly registering them. Through this exercise, the employer has to file employee wise number of days for which wages paid & the amount of wages paid respectively to ascertain the amount of contributions payable.

ESIC has facilitated payment of ESI contribution online by Employer via the payment gateway of 58 banks in addition to SBI.

The total amount of contribution (both the shares) in respect of all the employees for each month is to be deposited in any branch of SBI by ONLINE generation of a challan through ESIC portal using his credentials. ESIC has facilitated payment of ESI Contribution online by employer via the payment gateway of 58 banks in addition to SBI.

Any sum deducted by the Principal employer from wages under the ESI Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted as per Section 40 (4) of the ESI Act,1948. Non-payment or delayed payment of the Employee's contribution deducted from the wages of the employee amounts to ' Breach of trust' and is punishable under IPC 406, 409 and also an offence u/s 85 of ESI Act.

An employer who fails to pay the contribution within the limit prescribed under Regulation 31, shall be liable to pay simple interest at the rate of 12% per annum in respect of each day of delay or default in payment of contribution ( Regulation 31-A)

The Corporation may levy and recover damages under Reg. 31C at the following rates, not exceeding the amount of contribution payable for default or delay in payment of the contribution.
Period of delay Rate of damages in % p.a.

1. Less than 2 months 5 %
2. 2 to 4 months 10 %
3. 4 to 6 months 15 %
4. 6 months and above 25 %

The employer is liable for prosecution under Section 85(a) for the first time, Whoever, having been convicted by a court of an offence punishable under the Act, commits the same offence shall, for every such subsequent offence, liable for enhanced punishment under section 85 A of the Act.

For ESI compliance the employer has to maintain following records:

1. Muster roll, wage record and books of Account maintained under other laws.
2. Accident Register in new Form-11 and
3. An inspection book.
4. The immediate employer is also required to maintain the Employees’ Register for the employees deployed to the principal employer.

The Employer has to submit following records:

1. Accident Report: Notice of Accident to the concerned Branch office in Form -12 should be submitted on-line within 24 hours.
2. Abstention verification Report: It is required to be submitted to the Branch office as and when it is sought by the Branch Manager in respect of any IP.
3. Records including attendance, wages and books of accounts etc. in respect of principal employer and records of immediate employer as required by the Labor Laws.