The government has initiated various schemes for the welfare of the employees. One such scheme is the Employee State Insurance Scheme and is one of the most important social security benefits for the employees in India. The Employees State Insurance Corporation (ESIC) is the apex body governing this scheme and it ensures insurance protection for the employees covered under this scheme. However, is this scheme mandatory or optional? What are the benefits of ESIC registration in India? Let’s find out!
Applicability of ESIC Registration in India
ESI registration is governed by the Employee State Insurance Act, 1948 that lays down the broad provisions and the applicability of ESIC registration. ESIC registration in India is applicable to all the factories and other establishments that have 10 or more employees earning a wage of less than Rs. 21,000 per month. In this article, we will discuss the ESIC benefits in India. However, it does not cover seasonal mines or factories.
ESIC Benefits For the Employees & Workers
ESIC scheme is one of the most beneficial schemes for the employees and workers of any organisation. The broad benefits extended by this scheme can be encapsulated as follows:
1.Medical Benefits
One of the primary ESIC benefits is that it provides medical benefits to insured employees and their families. Employees who are registered under ESIC are eligible for medical treatment at ESIC-run hospitals and dispensaries, where they receive free medical care for all illnesses covered under the scheme. Employees can also avail of cashless treatment at empaneled private hospitals. The extent of medical care will depend upon the state government. It can include the following types:
- Full medical care is provided to the insured person and his family members.
- There is no limit to the maximum amount of expenditure that can be incurred on the treatment of the insured person or his family member.
2.Sickness Benefits
If an employee is unable to attend work due to an illness, he/she can receive sickness benefits under the ESIC scheme. The amount of the benefit is equal to 70% of the average daily wage, and it is paid for a maximum of 91 days in a year. However, to qualify for the sickness benefit, the insured employee or worker needs to contribute at least 78 days in a contribution period of 6 months. Those workers who are suffering from long-term and malignant diseases can claim the sickness benefit with an enhanced rate of 80% and an extended period of 2 years. This ensures that the employees are compensated for any loss due to sickness, especially in case of chronic ailments.
3.Maternity Benefits
Female employees who are registered under ESIC are eligible for maternity benefits to ensure compensation for any loss due to the absenteeism during their maternity period. The benefit amount is equal to the average daily wage, and it is paid for a maximum of 3 months. However, it can further be extended by one month on medical advice. However, the employee should have contributed for 70 days in the preceding year.
4.Disability Benefits
In the event of an employee suffering from a permanent disability, he/she is eligible for a disability benefit under the ESIC scheme. The disablement benefit amount is 90% of the wages in the form of a monthly payment in the case of permanent disablement. Whereas in the case of temporary disablement, 90% wages are payable for as long as the temporary disability continues. Disability benefits provide the much needed support to the affected employees and their families, especially due to the hampered earning capabilities.
5.Death Benefits
It is also known as dependent benefits. In the unfortunate event of an employee’s death, the dependents of the deceased employee are eligible for death benefits under the ESIC scheme. The benefit amount is 90% of the average daily wage and is paid in case the death is due to an occupational hazard or employment injury.
6.Funeral Expenses
In the event of an employee’s death, the dependents are eligible for funeral expenses under the ESIC scheme. The benefit amount is equal to 10,000 rupees, and it is paid to the claimant to support the funeral expenses. Funeral expenses are separate from the death benefits provided under the ESIC scheme.
7.Tax Benefits
The employer’s contribution to the ESIC scheme is tax-deductible, and the employee’s contribution is exempt from tax under section 80C of the Income Tax Act. Employers can claim deduction of the expenses associated with the ESIC.
8.Unemployment Allowance
ESIC ensures that the job loss doesn’t mean loss of your income. Unemployment allowance is paid under the Rajiv Gandhi Shramik Kalyan Yojana to a person who became unemployed after being insured for 3 years or more either due to the closure of the factory, permanent invalidity or retrenchment. The following are the allowances applicable in this case:
- Unemployment allowance that will be equal to 50% of wages paid for a maximum period of up to 1 year.
- Medical care is provided to self and family from the ESI hospitals or dispensaries during the period for which the insured person is receiving an unemployment allowance.
- Vocational training in order to upgrade skills where the expenditure on such training is borne by the ESIC.
What You Should Do?
If you are an organisation that falls under the applicability criteria as mentioned above, then you need to obtain ESIC PF registration to get your employees and workers covered under the ESIC scheme. The ESIC registration process is not very complex and it provides a wide range of social security and health insurance benefits to employees in India. Further, it also acts as a sign that the organisation actually cares for its employees and workers.
It helps to protect employees and their families against the financial burden of medical expenses, disability, death, and other contingencies. Through ESIC online registration, employers can ensure that their employees receive the best possible medical care and support in case of emergencies. In case you need any assistance in relation to the ESIC employer registration in India, feel free to contact the eAuditor Office.
