Dear Seniors,
I am working as an HR admin in a software development firm in Andhra Pradesh. Our company is under ESI coverage. However, I have a doubt. We are considering stopping ESI coverage for our employees since we are a software firm. Is it necessary to pay ESI for employees in our industry?
Possibility of Ceasing ESI Coverage
Is there a possibility to cease ESI coverage once it has been initiated? Please clarify this doubt promptly. If we can stop it, it would be more beneficial to our employees as both the employer and employee shares are being deducted from our salaries.
Thank you.
From India, Kakinada
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7I am working as an HR admin in a software development firm in Andhra Pradesh. Our company is under ESI coverage. However, I have a doubt. We are considering stopping ESI coverage for our employees since we are a software firm. Is it necessary to pay ESI for employees in our industry?
Possibility of Ceasing ESI Coverage
Is there a possibility to cease ESI coverage once it has been initiated? Please clarify this doubt promptly. If we can stop it, it would be more beneficial to our employees as both the employer and employee shares are being deducted from our salaries.
Thank you.
From India, Kakinada
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Dear Usha kiran, It is mandatory that employees should cover under ESI who are under gross salary of Rs.15ooo p.m. No employer is exempted from this coz it is an act. Rajesh
From India, Hyderabad
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From India, Hyderabad
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As Mr. Rajesh specified, ESI is applicable for all employees who earn a gross pay of up to Rs 15,000. If the gross pay exceeds this amount, you can exempt them after they complete half a year. Through ESI, all employees will benefit. There may be a lack of hospitals and other small medical facilities, but there are other benefits as well. Therefore, it is advisable to avail of ESI benefits.
Regards.
From India, Bangalore
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Regards.
From India, Bangalore
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You provide more benefits than ESIC and make an application to ESIC for exemption. After obtaining exemption, you are not required to pay to esic corporation.
From United States
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From United States
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Dear Jeevrathnam ji, if any site is under ESIC coverage then any contractor can avoid ESIC registration of contract workers and get WC policy for them ? pls clarify. regards, sanjeev chauhan
From India, New Delhi
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From India, New Delhi
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Dear Sanjeev, If site is under ESIC coverage, then he should opt for ESIC License and it is mandatory. Regards Praveen
From India, Bengaluru
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From India, Bengaluru
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I agree with what others have written above. If you are covered under ESI, it is mandatory for you to keep paying ESI. PF has criteria for exemption, but ESI does not.
As for what Mr. Sanjeev Chauhan has written, ESI is applicable when the town/city where your establishment is located has a municipality population of 25,000 and above. If the population is less than 25,000, the WC, i.e., Workmen's Compensation Act, automatically applies.
Benefits of ESIC
The section 46 of the Act envisages the following six social security benefits:
- **Medical Benefit:** Full medical care is provided to an insured person and his family members from the day he enters insurable employment. There is no ceiling on expenditure on the treatment of an insured person or his family member. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs. 120/-.
- **Sickness Benefit (SB):** Sickness Benefit in the form of cash compensation at the rate of 70 percent of wages is payable to insured workers during periods of certified sickness for a maximum of 91 days in a year. To qualify for sickness benefit, the insured worker is required to contribute for 78 days in a contribution period of 6 months.
- **Extended Sickness Benefit (ESB):** SB extendable up to two years in the case of 34 malignant and long-term diseases at an enhanced rate of 80 percent of wages.
- **Enhanced Sickness Benefit:** Enhanced Sickness Benefit equal to full wage is payable to insured persons undergoing sterilization for 7 days/14 days for male and female workers, respectively.
- **Maternity Benefit (MB):** Maternity Benefit for confinement/pregnancy is payable for three months, which is extendable by a further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding year.
- **Disablement Benefit:**
- **Temporary Disablement Benefit (TDB):** From day one of entering insurable employment and irrespective of having paid any contribution in case of employment injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long as disability continues.
- **Permanent Disablement Benefit (PDB):** The benefit is paid at the rate of 90% of wage in the form of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical Board.
- **Dependants' Benefit (DB):** DB paid at the rate of 90% of wage in the form of monthly payment to the dependants of a deceased insured person in cases where death occurs due to employment injury or occupational hazards.
- **Other Benefits:**
- **Funeral Expenses:** An amount of Rs. 10,000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment.
- **Confinement Expenses:** An insured woman or an I.P. in respect of his wife in case confinement occurs at a place where necessary medical facilities under the ESI Scheme are not available.
In addition, the scheme also provides some other need-based benefits to insured workers:
- **Vocational Rehabilitation:** To permanently disabled insured person for undergoing VR Training at VRS.
- **Physical Rehabilitation:** In case of physical disablement due to employment injury.
- **Old Age Medical Care:** For insured person retiring on attaining the age of superannuation or under VRS/ERS and person having to leave service due to permanent disability insured person & spouse on payment of Rs. 120/- per annum.
- **Rajiv Gandhi Shramik Kalyan Yojana:** This scheme of Unemployment allowance was introduced w.e.f. 01-04-2005. An insured person who becomes unemployed after being insured for three or more years, due to closure of factory/establishment, retrenchment, or permanent invalidity, is entitled to:
- Unemployment Allowance equal to 50% of wage for a maximum period of up to one year.
- Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives unemployment allowance.
- Vocational Training provided for upgrading skills - Expenditure on fee/traveling allowance borne by ESIC.
An interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fixed percentage of the workers' wages, whereas they are provided social security benefits according to individual needs without distinction.
Cash Benefits are disbursed by the Corporation through its Branch Offices (BOs) / Pay Offices (POs), subject to certain contributory conditions.
Hope that takes care of all your concerns!
Regards,
Aditya Joshi
From India, Ahmadabad
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As for what Mr. Sanjeev Chauhan has written, ESI is applicable when the town/city where your establishment is located has a municipality population of 25,000 and above. If the population is less than 25,000, the WC, i.e., Workmen's Compensation Act, automatically applies.
Benefits of ESIC
The section 46 of the Act envisages the following six social security benefits:
- **Medical Benefit:** Full medical care is provided to an insured person and his family members from the day he enters insurable employment. There is no ceiling on expenditure on the treatment of an insured person or his family member. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs. 120/-.
- **Sickness Benefit (SB):** Sickness Benefit in the form of cash compensation at the rate of 70 percent of wages is payable to insured workers during periods of certified sickness for a maximum of 91 days in a year. To qualify for sickness benefit, the insured worker is required to contribute for 78 days in a contribution period of 6 months.
- **Extended Sickness Benefit (ESB):** SB extendable up to two years in the case of 34 malignant and long-term diseases at an enhanced rate of 80 percent of wages.
- **Enhanced Sickness Benefit:** Enhanced Sickness Benefit equal to full wage is payable to insured persons undergoing sterilization for 7 days/14 days for male and female workers, respectively.
- **Maternity Benefit (MB):** Maternity Benefit for confinement/pregnancy is payable for three months, which is extendable by a further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding year.
- **Disablement Benefit:**
- **Temporary Disablement Benefit (TDB):** From day one of entering insurable employment and irrespective of having paid any contribution in case of employment injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long as disability continues.
- **Permanent Disablement Benefit (PDB):** The benefit is paid at the rate of 90% of wage in the form of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical Board.
- **Dependants' Benefit (DB):** DB paid at the rate of 90% of wage in the form of monthly payment to the dependants of a deceased insured person in cases where death occurs due to employment injury or occupational hazards.
- **Other Benefits:**
- **Funeral Expenses:** An amount of Rs. 10,000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment.
- **Confinement Expenses:** An insured woman or an I.P. in respect of his wife in case confinement occurs at a place where necessary medical facilities under the ESI Scheme are not available.
In addition, the scheme also provides some other need-based benefits to insured workers:
- **Vocational Rehabilitation:** To permanently disabled insured person for undergoing VR Training at VRS.
- **Physical Rehabilitation:** In case of physical disablement due to employment injury.
- **Old Age Medical Care:** For insured person retiring on attaining the age of superannuation or under VRS/ERS and person having to leave service due to permanent disability insured person & spouse on payment of Rs. 120/- per annum.
- **Rajiv Gandhi Shramik Kalyan Yojana:** This scheme of Unemployment allowance was introduced w.e.f. 01-04-2005. An insured person who becomes unemployed after being insured for three or more years, due to closure of factory/establishment, retrenchment, or permanent invalidity, is entitled to:
- Unemployment Allowance equal to 50% of wage for a maximum period of up to one year.
- Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives unemployment allowance.
- Vocational Training provided for upgrading skills - Expenditure on fee/traveling allowance borne by ESIC.
An interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fixed percentage of the workers' wages, whereas they are provided social security benefits according to individual needs without distinction.
Cash Benefits are disbursed by the Corporation through its Branch Offices (BOs) / Pay Offices (POs), subject to certain contributory conditions.
Hope that takes care of all your concerns!
Regards,
Aditya Joshi
From India, Ahmadabad
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ESI Benefits for an Employer
- Providing medical benefits to employees covered under the ESI Act.
- Maternity Benefit Act for women employees covered under the ESI Act.
Benefits under ESI Act
1. Sickness Benefit
2. Extended Sickness Benefit
3. Enhanced Sickness Benefit
4. Disablement Benefit
5. Dependent Benefit
6. Maternity Benefit
7. Funeral Expenses
Contribution
Employees with fixed gross wages up to ₹15,000 will be eligible for coverage. The employer is required to contribute at 4.75%, and the applicable employee is to contribute at 1.75% based on monthly earned gross wages.
Thanks & Regards,
Stella
From India, Chennai
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- Providing medical benefits to employees covered under the ESI Act.
- Maternity Benefit Act for women employees covered under the ESI Act.
Benefits under ESI Act
1. Sickness Benefit
2. Extended Sickness Benefit
3. Enhanced Sickness Benefit
4. Disablement Benefit
5. Dependent Benefit
6. Maternity Benefit
7. Funeral Expenses
Contribution
Employees with fixed gross wages up to ₹15,000 will be eligible for coverage. The employer is required to contribute at 4.75%, and the applicable employee is to contribute at 1.75% based on monthly earned gross wages.
Thanks & Regards,
Stella
From India, Chennai
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