An Act to provide for certain benefits to employees in case of sickness, maternity and employment injury.
The Act applies to all factories, Shops, Hotels & Restaurants and other establishments using power and employing 10 or more persons and to non-power using manufacturing units and establishments employing 20 or more persons for wages not exceeding Rs. 15,000/- per month are covered under the ESI Scheme.
Registration of a factory / establishment with the Employees State Insurance Corporation is a statutory responsibility of the employer. The employer in respect of a factory / establishment to which the Act applies for the first time is liable to furnish Declaration of Registration in Form 01 (Employers’ Registration Form) within 15 days of the factory / establishment employing 20 or more eligible employees.
The provisions of the ESI Act are not applicable to factories or establishments run by the State Governments / Central Government whose employees are otherwise in receipt of social security benefits substantially similar or superior to the benefits provided under the ESI Act.
Rates of contribution
The amount of contribution by the employer is 4.75% of the wages and by the employee 1.75% of the wages.
The employee is eligible for Sickness benefit Maternity benefits Disablement benefits and Medical benefits. Further dependants’ of the employee are also eligible for certain benefits.
Return of contributions to be sent to appropriate office
An employer who is liable to pay contributions in respect of any employee shall pay those contributions within 21 days of the last day of the calendar month and also file monthly return by 21st of the following month. Further half yearly returns are to be filed before 11th May and 11th November of each year.