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What is Employees’ State Insurance (ESIC)?

Employees’ State Insurance (ESIC) is a government-mandated social security and health insurance scheme that provides medical care and financial protection to employees and their families.

  • Covers medical, maternity, disability & injury benefits
  • Joint contribution by employer (3.25%) & employee (0.75%)
  • Ensures employee welfare & workplace security
  • Mandatory for eligible establishments in India
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Benefits of Employees’ State Insurance (ESIC)

The Employees’ State Insurance (ESIC) scheme offers a comprehensive social security and health insurance framework that protects employees and supports employers in maintaining workplace welfare compliance. Key benefits include:

Comprehensive Medical Care

ESIC provides full medical treatment for employees and their dependents from the first day of employment, covering consultations, hospitalization, medicines, and specialist care.

Sickness Benefits

Employees receive cash compensation during certified sickness periods, helping manage wage loss while recovering.

Maternity Benefits

Female employees are entitled to paid maternity leave and medical care, covering pregnancy, childbirth, and related complications.

Employment Injury Benefits

Employees suffering work-related injuries or occupational diseases receive medical care and cash compensation for temporary or permanent disability.

Disability Benefits

ESIC provides regular cash support for employees with temporary or permanent disabilities, ensuring livelihood protection.

Dependents’ Benefits

In the event of an employee’s death due to employment injury, dependents receive periodic financial assistance.

Funeral Expenses

ESIC covers funeral costs for the deceased insured employee, supporting their family during difficult times.

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How Does Employees’ State Insurance (ESIC) Work?

The Employees’ State Insurance (ESIC) scheme is a statutory social security and health insurance program that provides comprehensive protection to employees in India. Here’s how it works:

Coverage of Employees

Employers enroll eligible employees under the ESIC scheme based on statutory wage limits. Establishments or factories with more than 10 employees must register for ESIC benefits to ensure mandatory social security compliance.

Monthly Contributions

ESIC contributions are jointly made by employers (3.25%) and employees (0.75%) of the employee’s wages, ensuring continuous funding for medical and cash benefits.

Timely Payment

Female employees are entitled to paid maternity leave and medical care, covering pregnancy, childbirth, and related complications.

Medical and Cash Benefits

Insured employees and their dependents receive comprehensive medical care and cash benefits during sickness, maternity, employment injury, or disability, providing financial security and workplace welfare.

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Key Features of Employees’ State Insurance (ESIC/ESI)

Statutory Social Security Scheme

A government-mandated social security program providing health and financial benefits to eligible employees across India.

Long-Term Employee Protection

Safeguards employees and their dependents by offering sustained medical care and financial support during sickness, maternity, employment injury, or disability.

Comprehensive Cash Benefits

Provides monetary support for sickness, maternity, employment injury, disability, and death, ensuring financial security at the workplace.

Maternity and Sickness Support

Insured employees are entitled to paid maternity leave and cash benefits during certified illness, promoting employee welfare and workplace compliance.

Online Services & Accessibility

ESIC offers digital services for registration, claim filing, and tracking, making it convenient for both employers and employees while ensuring compliance.

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Conclusion

Employees’ State Insurance (ESI/ESIC) is a critical statutory scheme that provides healthcare, social security, and financial protection to employees and their families. At BIOS (Business India Outsourcing), we offer comprehensive ESI services, including employee registration, contribution management, record keeping, and timely statutory filings. Partnering with BIOS ensures full ESI compliance, streamlined processes, and secure employee welfare, allowing businesses to focus on growth while meeting their mandatory social security obligations.

“Empowering employees with security, ensuring businesses stay compliant.”

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EMPLOYEES’ STATE INSURANCE (ESI) – IMPORTANT FAQs

ESI is a Government of India social security scheme that provides medical care and cash benefits to employees in case of sickness, maternity, disability, employment injury or death.
It also covers the family members of the employee.

ESI is administered by the Employees’ State Insurance Corporation (ESIC) under the Ministry of Labour & Employment, Government of India.

Any employee working in a covered establishment whose monthly wage is ₹15,000 or less (₹25,000 for persons with disability) is covered. Once enrolled, the employee remains covered till the end of the contribution period even if salary increases beyond the limit.

Establishments having 10 or more employees (20 in some states) such as:
  • Shops
  • Offices
  • Educational institutions
  • Hospitals
  • Hotels & restaurants
  • Transport companies
  • Private firms
  • Manufacturing units
must register under ESI.

Yes. Every eligible employer must register within 15 days of becoming applicable.
Failure leads to penalties, interest, prosecution and recovery proceedings.

Employer registers online on www.esic.in
After registration, a 17-digit ESIC Code Number is generated.

It is a unique permanent identification number for the employer used for all ESI related filings and payments.

Every eligible employee must be registered online by the employer. Once registered, the employee gets a permanent Insurance Number and Pehchan Card.
This number remains same throughout life, even when changing jobs.

It is the ESI Identity Card which allows the employee and family to:
  • Get medical treatment
  • Avail hospital services
  • Claim cash benefits
It works anywhere in India.

Medical coverage starts from the first day of joining ESI employment. Family members are also covered.

ESI provides:
  • Doctor consultations
  • Medicines
  • Hospitalisation
  • Surgery
  • Tests (X-ray, blood, scans)
  • Maternity care
  • Super-specialty treatment
  • Ambulance services
All without linking to salary or contribution amount.

Within 21 days of the end of each month.
Late payment attracts:
  • 12% interest
  • Penalty up to 25%
  • Prosecution in serious cases

It is treated as criminal breach of trust under IPC 406. Employer can face prosecution and imprisonment.

A. Sickness Benefit : 70% of wages for up to 91 days per year if sick.
B. Extended Sickness Benefit : For serious long-term diseases – paid for up to 2 years.
C. Maternity Benefit:
  • 84 days for childbirth
  • 42 days for miscarriage
  • Paid at 100% wage rate
D. Temporary Disability Benefit : If injured at work – 90% of wages till recovery. E. Permanent Disability Benefit : Monthly pension for life based on disability percentage. F. Dependants’ Benefit : If employee dies due to work injury, family gets 90% of wages as pension. G. Funeral Expenses : Up to ₹10,000 paid to family or person who performs funeral.

Yes.
Spouse, children and dependent parents get:
  • Full medical treatment
  • Hospitalization
  • Medicines
  • Artificial limbs, appliances, etc.

If employee has completed 5 years in ESI, he and spouse can continue medical benefits by paying only ₹120 per year.
Widow also gets lifelong medical benefit.

Under Rajiv Gandhi Shramik Kalyan Yojana, ESI pays:
  • Unemployment allowance
  • Medical benefits for up to 1 year

ESI is calculated on:
  • Basic
  • DA
  • HRA
  • Overtime
  • Allowances
  • Incentives
  • Leave salary
  • Commission
Almost all cash payments to employees are included.

No, unless Government grants special exemption where better benefits are already provided.

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