Published by: OurTaxPartner.com | Your Trusted Partner for ESI & EPF Registration and Compliance
Introduction
The Employees’ State Insurance (ESI) scheme is one of India’s most important social security systems, offering a wide range of health, medical, and income-replacement benefits to workers in the organized sector. Managed by the Employees’ State Insurance Corporation (ESIC) under the Ministry of Labour and Employment, the ESI scheme is designed to support employees during sickness, maternity, injury, disability, and death.
In this blog, we’ll break down all the major benefits under the ESI scheme, explain eligibility conditions, and highlight how employers can remain compliant. For support with ESI registration and monthly return filing, OurTaxPartner.com offers expert end-to-end assistance.
Who Is Covered Under ESI?
- Employees working in establishments with 10 or more workers (20 in some states like Maharashtra and Chandigarh).
- Employees earning a gross monthly salary of ₹21,000 or less (₹25,000 for persons with disabilities).
- Once registered, employees are issued an ESI Insurance Number and Pehchan Card for identification.
ESI Contribution Structure (2024–25)
- Employer Contribution: 3.25% of gross salary
- Employee Contribution: 0.75% of gross salary
- Contributions are mandatory and must be deposited monthly on the ESIC portal.
1. Sickness Benefit
If an insured employee is unable to work due to illness, ESIC provides cash compensation of 70% of average daily wages for up to 91 days in two consecutive benefit periods.
Eligibility:
- Employee must have contributed for at least 78 days during a contribution period (6 months).
2. Extended Sickness Benefit
For serious long-term illnesses like tuberculosis, cancer, or mental illness, the benefit is extended for up to 2 years at 80% of wages.
List of covered diseases:
- Tuberculosis
- Chronic renal failure
- Leprosy
- Malignant cancers
- Schizophrenia and other chronic mental illnesses
- … and over 30 other long-term conditions
3. Maternity Benefit
Insured women are entitled to paid maternity leave at 100% of wages for up to 26 weeks (extendable in case of complications). Medical care and medicines are also provided.
Eligibility:
- Insured woman must have contributed for at least 70 days in the past 2 contribution periods (1 year).
4. Temporary Disablement Benefit
If an employee suffers an injury at work resulting in temporary disablement, ESIC pays 90% of average daily wages as long as the disability lasts.
Eligibility:
- No minimum contribution period required; benefit starts from day one of employment if injury is work-related.
5. Permanent Disablement Benefit
In the event of permanent physical disability due to workplace injury, the employee receives a lifetime monthly pension calculated based on the extent of loss of earning capacity.
Eligibility:
- Certified by a Medical Board constituted by ESIC.
6. Dependents’ Benefit
If an insured employee dies due to an employment injury or occupational disease, the dependents receive monthly payments totaling 90% of wages shared among:
- Spouse
- Children (up to age 25)
- Dependent parents
7. Funeral Expenses
A one-time payment of ₹15,000 is provided toward the funeral expenses of a deceased insured person.
8. Medical Benefit (Health Coverage)
Insured employees and their family members are entitled to free or subsidized medical treatment at ESIC hospitals, dispensaries, and clinics.
Includes:
- Consultations
- Medicines
- Diagnostic services
- Hospitalization and surgeries
- Maternity and childcare
9. Confinement Expenses
If an insured woman or the dependent wife of an insured male gives birth outside ESIC facilities, a cash benefit of ₹5,000 is paid.
10. Vocational Rehabilitation
Disabled employees may be referred for retraining and rehabilitation programs at ESIC-run centers to help them regain employability.
How to Avail ESI Benefits
- Employees must be registered under ESI by the employer.
- Use the Pehchan Card to visit ESIC hospitals or dispensaries.
- For cash benefits (maternity, sickness, disability), forms must be submitted to the ESIC branch office with medical certificates and wage details.
- Track benefit status online using the ESIC portal or contact your ESIC branch office.
Why Employers Should Stay Compliant
- ✔ Avoid penalties and interest under Section 85 of ESI Act
- ✔ Build employee trust and morale
- ✔ Ensure eligibility for tenders, licenses, and registrations
- ✔ Reduce operational risks during audits and inspections
Click here to register your business for ESI with OurTaxPartner.com
Frequently Asked Questions (FAQs)
Can ESI benefits be used in private hospitals?
Only if referred by an ESIC facility or in case of emergencies. Super-specialty treatments may be outsourced to empaneled private hospitals.
Are employees required to contribute while on maternity leave?
No. Contributions are not required during paid maternity leave. Benefits continue uninterrupted.
Can EPF and ESI be offered voluntarily?
Yes, especially EPF. ESI depends on location and eligibility but can be implemented proactively in notified areas.
Is ESI applicable to contract workers?
Yes. If the worker is employed through a contractor but works under your supervision and the establishment is eligible, ESI must be provided.
Conclusion
The ESI scheme offers a robust safety net that protects workers and their families during times of illness, childbirth, injury, or loss. For employers, it ensures compliance, enhances workforce morale, and builds a culture of care and trust.
Ready to implement ESI in your organization? Partner with OurTaxPartner.com to simplify registration, documentation, and compliance—ensuring your team gets the protection they deserve.
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