The full form of ESI is Employees’ State Insurance. ESI is a health insurance scheme created to provide Indian workers with medical and financial benefits. It is administered and regulated by the Employees State Insurance Corporation (ESIC).
History of ESI
The history of the Employees' State Insurance (ESI) scheme in India is marked by several key milestones. Below is a tabular representation of its development over the years:
| Year | Event | Description |
| 1943 | Formation of B. P. Adarkar Committee | The Government of India appointed Professor B. P. Adarkar to create a report on the health insurance needs of industrial workers. |
| 1944 | Adarkar Report Submitted | The report recommended the establishment of a social insurance scheme to protect workers against health risks and other contingencies. |
| 1948 | Enactment of the ESI Act | The Employees' State Insurance Act was enacted by the Parliament of India, laying the foundation for the ESI scheme. |
| 1952 | The ESI scheme was formally inaugurated in Kanpur and Delhi, covering around 1.20 lakh workers at its inception. | |
| 1954 | ESI Scheme Extended to Other Areas | The scheme was extended to several other industrial centres across India, expanding its coverage significantly. |
| 1961 | Introduction of Family Welfare Services | Family welfare services were introduced under the ESI scheme, providing comprehensive medical care to workers' families. |
| 1975 | Implementation of Scheme for Unorganised Sector | The scheme began to cover certain segments of the unorganised sector, broadening its scope to include more workers. |
| 1989 | Amendments to the ESI Act | Significant amendments were made to the ESI Act, enhancing benefits and improving administration. |
| 2000 | Digitalisation of ESI Services | Introduction of computerised services for better efficiency and transparency in the administration of the ESI scheme. |
| 2010 | Expansion to Cover More Employees | The wage ceiling for coverage under the ESI scheme was raised to ₹15,000, later increased to ₹21,000 in 2016, to include more employees. |
| 2018 | Introduction of New Benefits | Introduction of new benefits like Atal Bimit Vyakti Kalyan Yojana (ABVKY), providing unemployment allowance to insured persons. |
| 2020 | COVID-19 Pandemic Response | ESIC introduced measures to support workers affected by the pandemic, including medical care and financial assistance. |
| 2021 | Expansion of Coverage | Further expansion of coverage to include gig workers and other segments of the informal economy. |
| 2023 | Modernisation and Digital Initiatives | Continued efforts towards modernisation and enhancing digital services for better accessibility and efficiency in delivering ESI benefits. |
Objectives of ESI
The Employees' State Insurance (ESI) scheme aims to provide comprehensive social security and health insurance to employees. Key objectives include:
- Medical care: Offer complete medical care to insured employees and their dependents, including outpatient and inpatient services.
- Financial protection: Provide financial protection during periods of sickness, maternity, disability, or death due to employment injury.
- Social security: Ensure long-term social security for employees and their families through various benefits and allowances.
- Rehabilitation: Support the rehabilitation of insured persons who suffer from employment-related disabilities.
- Preventive measures: Promote preventive health measures and improve overall health standards among employees.
- Welfare services: Extend family welfare and other social security services to the dependents of insured persons.
- Workforce stability: Enhance workforce stability by reducing absenteeism due to health issues, thus benefiting businesses.
Organisations covered as per ESI
- The ESI scheme is mandatory throughout India, except in the states of Arunachal Pradesh and Manipur.
- The ESI plan is being extended to cover industries such as preview theatres and cinemas, hotels and restaurants, shops and newspaper establishments.
- The ESI scheme is also applicable to medical establishments, and private educational institutions with a minimum of ten employees.
Eligibility for ESI registration in India
Employees earning a monthly wage of Rs. 21,000 or less are covered under the ESI Act. This wage limit was raised from Rs. 15,000 in December 2016.
Required documents for ESI registration
To register for ESI, businesses need to submit the following documents:
- Registration certificate:
- For companies: Certificate of incorporation.
- For partnerships: Partnership deed.
- For proprietorships: Registration certificate.
- Employee details:
- List of employees with their monthly wages.
- Attendance register.
- Employer's details:
- PAN card of the business and the owner.
- Address proof of the business (utility bill, rental agreement).
- Bank details:
- Bank statement or a cancelled cheque of the business.
- Factory/shop license:
- License issued under the Shops and Establishment Act or the Factories Act.
- Other documents:
- Memorandum of Association (MOA) and Articles of Association (AOA) for companies.
- List of directors or partners.
- Specimen signature of the employer.
Ensure all documents are current and accurately reflect the business information.
Procedure for ESI registration
Registering for the Employees’ State Insurance (ESI) scheme is a straightforward process that ensures compliance with legal requirements and access to various employee benefits. Here’s a step-by-step guide to help you through the registration process:
- Determine eligibility: Ensure your business or organization employs ten or more workers and meets the wage criteria for ESI coverage.
- Gather required documents: collect necessary documents such as the business registration certificate, PAN card, proof of address, details of employees, and their salary information.
- Visit the ESIC website: Go to the official Employees State Insurance Corporation (ESIC) website to access the online registration portal.
- Fill out the registration form: Complete the ESI registration form with accurate details about your organization and employees. This includes information about your company, contact details, and employee wage details.
- Submit supporting documents: Upload the required documents as specified on the ESIC portal. Ensure all documents are clear and legible.
- Verify and submit: Review the filled form and uploaded documents for accuracy. Submit the registration form through the online portal.
- Receive ESI code: Upon successful submission, you will receive an ESI code for your organization. This code is essential for all future ESI-related transactions.
- Compliance and contribution: After registration, ensure timely payment of ESI contributions and compliance with the scheme’s regulations.
By following these steps, your organization can efficiently register for ESI and provide your employees with essential health and financial benefits.
Benefits of ESI
ESI provides a range of benefits to insured employees and their dependents, including:
- Medical benefits: Comprehensive medical care, including outpatient and inpatient treatment, specialist consultations, and hospitalisation.
- Sickness benefits: Financial compensation during certified sickness periods, up to 91 days in a year.
- Maternity benefits: Financial aid for female employees during maternity leave, covering pre-natal and post-natal periods.
- Disability benefits: Compensation for temporary or permanent disabilities resulting from workplace injuries.
- Dependents’ benefits: Pension to dependents in case of death due to employment injury.
- Funeral expenses: Financial assistance for funeral expenses of the deceased insured person.
- Rehabilitation allowance: Support for vocational rehabilitation for insured persons with disabilities.
- Confinement expenses: Financial aid for confinement expenses if confinement occurs at a place where necessary medical facilities under the ESI scheme are not available.
What are the due dates for the ESI payment and return filing?
ESI contribution payment:
Monthly contributions must be deposited by the 15th of the following month.
Return filing:
- Half-yearly returns must be filed by the following due dates:
- For the period April to September: 11th November.
- For the period October to March: 11th May.
Annual return:
The annual return must be filed by the 11th of November each year.
In the end, we can say that ESI plays a crucial role in ensuring the well-being and security of employees, thereby enhancing business productivity. Timely compliance with ESI registration, payments, and returns is essential for avoiding penalties and ensuring smooth operations. Securing a business loan can support timely ESI compliance by providing necessary funds for meeting financial obligations promptly, thus safeguarding employee welfare and maintaining uninterrupted business operations. This financial assistance enables businesses to manage cash flow effectively, cover ESI contributions on time, and maintain compliance, thereby fostering a stable and productive work environment essential for sustained business growth.
