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What Is The ESI Scheme: Relevancy And Attributes

Employees’ State Insurance Corporation (ESIC) is an enacted corporate body. The ESIC has been set up by the ESI Act 1948. The body is responsible for the administration of ESI Scheme. A self-funded inclusive social security project, it protects employees covered under the project against financial distress, or it can come out of sickness, or death due to employment injuries etc.

What Is The ESI Scheme: Relevancy And Attributes

The body has its headquarters in New Delhi. It also has 23 regional offices, 26 sub-regional offices, and over 800 local offices.

The Medical Benefit Council also advises the body on administration.

Where Is The ESI Scheme Relevant?

The ESI scheme is pertinent to all establishments (including factories) elucidated in the Act with 10 or more employed persons in the establishment. The monthly wage of the beneficiaries’ should not be more than Rs. 21,000.

Even if the employer has 10 or more employees, all of them agnostic of the salary are quantified. The project also includes motor road transports, restaurants, theatres, hotels, shops.

ESI Scheme Attributes

Registered employees under the ESI Act (1948) are provided with complete medical care and attention during the time of inability, recovering from health and working ability. While absent from work due to being ill, or accidents which lead to losing wages, complete help (in terms of finance) is given to employees to indemnify the loss of wage. The ESI scheme facilitates medical help to members of the employees’ family also.

A total of 2.93 crore employees are provided help by the scheme with 12.40 crores beneficiaries (recorded on 31st March 2017).

Basically, the scheme’s benefits can be divided into two groups:

  1. Benefits concerning cash (like disablement, maternity, medical bonus etc.),
  2. Medical care benefits not concerning cash.

The ESI scheme’s nature is to be instrumental in self-financal terms. The funds are developed out of the employees’ contribution and paid monthly by employers at a fixed rate of paid wages.

Also read – How To Pay Less for Bank Services Post DGGST Notice To Banks In India

Right now, the benefaction rate of employee is 1.75% of wages. The benefaction rate of employer’s is at 4.75% of paid wages. For new areas, the benefaction rate is 1% and 3% for the first 24 months, for employee and employer respectively.

The benefaction from the employer make its own share in its own share in commedation of employees. This concerns employees whose average wage is Rs. 137 daily. These employees are not liable from own contribution.

Benefaction has to be paid by an employer and deduction of employees’ contribution from wages. This has to be deposited with ESIC in 15 days from the last calender day of the month (the time in which the contribution is due). Payments are done eihter online or through authorized and deputed public sector banks.

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