Explore and learn any information you may require on ESIC. This page will provide you with all essential information on ESIC and answer your question about what is the new rule of the ESIC. It is a simple explanation that you will find here with enough information to give you a foundation to find out more.
The Employee State Insurance Corporation Scheme or ESIC is a social security body. It is owned by the Ministry of Labour and Employment of the Government of India. It provides financial support to its members in case of health and medical emergencies. Another social security body is the Employees Provident Fund Organisation.
The new rule of the ESIC refers to the new rate of contribution that has been put into effect by the Government of India. Before we get into the new regulations and revisions of the ESIC, let us look at what the ESIC is and what it does.
About the ESIC
The ESIC goes through several changes and amendments. This is to keep up with the changes made in the Government and the country’s economy.
It began with the Employees’ State Insurance Act (1948). India was slowly but surely emerging as an economically stable country at this time. This was only possible because of the growth of the working class in India. The Government recognized this as well and wanted to ensure this sector of society would not falter. The Indian Government decided to consider the workers’ health and financial situation.
The Employees’ State Insurance Act (1948) would ensure that the workers would be provided with financial support. This would give the workers social security, enabling them to increase the growth of the working class sector. The health problems include all kinds of diseases, especially those contracted at their workplace. These diseases can also have temporary or permanent disabilities.
If the workers cannot earn or perform their daily tasks due to health-related reasons, they can be financially supported by the Employee State Insurance Corporation Scheme. This is an effort on the Government’s part to help the working sector of the country to have the security they need to grow and develop.
Benefits of ESIC
If the employee has a medical emergency caused by work in the company, the ESIC will compensate and pay the employee’s wages.
If the employee has a disease, the ESIC will pay the medical bills for the duration of their condition. If the employee is temporarily disabled, they will still receive their monthly wages for the months they cannot work. If it is a permanent disability, the ESIC will ensure the employee gets monthly salaries for the rest of their life.
Employees on medical leave will be paid through ESIC. And for 24 months after the employee may have lost their employment involuntarily, the ESIC will pay the employee monthly wages until they find work again.
These are just a few benefits that being a member of the ESIC will bring to employees and companies.
The new rule of the ESIC may make people hesitant to register under the ESIC, but it is most important that they do so.
What does ESIC stand for?
As mentioned, the ESIC was introduced for the working class. But, even with this, specific criteria must be met to qualify for the ESIC.
First, under Section 2 (12) of the Act, employees of non-seasonal companies with at least 10 workers and more are eligible to apply to be a member of the ESIC. Any such company must immediately register under the ESIC. Once registered, the employee cannot transfer the right to receive benefits from the ESIC to someone other than themselves.
The second criterion is the wage limit of the employee. The limit has been set at Rs. 21,000 with effect from 1 January 2017. An employee can register under the Employee State Insurance Corporation Scheme if the monthly wages fall under this limit.
The Scheme also covers a large area of the working-class sector. This would include even businesses like newspaper stands, cinemas, restaurants, etc. the Employee State Insurance Corporation Scheme also covers more ground to include private institutions which employ 10 or more people. This same principle also applies to medical institutions that are not yet well-established and just starting up.
Click here to know more about ESIC online registration
Contribution by the Employer and Employee
This section is where we see the new rule of the ESIC being put into effect. The Employee State Insurance Corporation Scheme is meant to be contributory.
The rates of contributions by both employers and employees are reviewed and revised from time to time. The latest revision was with effect in 2019. From 1 July 2019, the new rule of the ESIC came into effect, i.e., the rate of contribution of the ESIC came into effect.
The rate of contribution for the employee was 0.75%. For employers, it was 3.25%. This is still being used and implemented, with no revisions. An exception is an employee with a daily wage of Rs.137. However, their employer will still have to meet the contribution rate and not be exempted.
Conclusion
All this information is essential for you to know such areas. Without this, people can be easily confused. They can also miss out on many incredible benefits offered by schemes such as the Employee State Insurance Corporation Scheme.
VakilSearch can provide you with more information on ESI and ESIC, their various features, and how to register under them. Further, it can also offer you detailed information on the whole process, including eligibility, the types of criteria that need to be met, the kind of documents necessary for the operation of registering, etc.
They can also answer any questions you may have in this area. VakilSearch has a page of FAQs that has responded to almost all possible questions and inquiries. However, if you still cannot find an answer, you can post your question, and they will try their best to provide you with relevant information.
ESIC is a vast scheme that the Government of India has implemented, which may just be scratching the surface of the information available. Do visit the VakilSearch website to find out more!
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