If you aren't able to keep up don't worry we got you covered here is all the latest news about the ESI.
The Employees’ State Insurance Corporation (ESIC), a government organisation, is in charge of managing the ESI scheme. The scheme basically offers employees and their families financial and medical support. When an employee is unable to fulfill his or her duties because of illness, a work-related injury, or pregnancy, assistance is provided. If you are also a member of the ESI scheme, then here is the latest news about the ESI that one should be aware of.
ESI Rates of 2022
The contribution rate for the ESI scheme is set by the Indian government. The rates are routinely changed. As of now, the government reduced the contribution rate in June 2019, effective from 1 June 2019.
At present, the employee’s contribution rate (w.e.f. 1.07.2019) is 0.75 percent of the wages, and that of the employer is 3.25% of the wages paid/payable in respect of the employees in every wage period.
Any non-seasonal factory or business with more than 10 employees (or 20 employees in some states) and a maximum annual pay of ₹21,000 is required to register with the ESIC, and this scheme offers its employees ESI benefits.
Rate of Contribution Under ESI
The ESIC is a social security program created to offer socio-economic security to employees, as well as to their family members and dependents. The ESIC announces the contribution rates, which are routinely revised. The contribution includes both employer & employee contributions. The latest revision is w.e.f. 01.07.2019 & the rates are as followed:
- Employer Contribution – 3.25% of the wages that are paid/payable.
- Employee Contribution – 0.75% of the wages that are paid/payable.
If the employee’s daily average wage is up to ₹137 then they are exempt from contributing. However, the employer is required to pay their share of the contribution.
Within 15 days after the end of the month in which contributions are made, employers are required to subtract the employee contribution from the wages bill and pay the employer and employee contribution at the rates outlined above. The State Bank of India and a few other banks have the authority to receive contributions on behalf of ESIC.
Period of Contribution
The following table illustrates the window period for contributions and for obtaining cash benefits:
Contribution Cash Benefit
1 April – 30 Sept 1 Jan of the year following to 30 June
1 Oct to 31 March of the year following 1 July to 31 December.
Where is it Applicable?
ESI applies to any organization with ten or more employees, including non-manufacturing businesses like retail stores, hotels, and restaurants, as well as movie theatres, businesses that use motor vehicles for transportation, publishing companies, and private educational and healthcare facilities.
Various states have different requirements for the minimum number of employees needed to join the ESI scheme, including Maharashtra, Meghalaya, Mizoram, Nagaland, Goa, Chandigarh, and Assam (20); Jharkhand, Haryana, Karnataka, Tripura, West Bengal, Rajasthan, Andhra Pradesh, and Delhi (10).
Wage Limit
Employees are eligible for the benefits of the scheme if their monthly pay is less than ₹21,000. In conclusion, under the ESI Act, workers for factories or companies with ten or more employees who get salaries of up to ₹21,000 per month are eligible for health benefits. If the worker’s daily average wage is ₹137, there are exceptions to the rule. They are exempt from making salary contributions to the scheme. For such people, only the employer’s contribution is paid.
If an employee earns more than ₹21,000 per month in wages, is he or she still covered by the ESI scheme?
After April or October for the relevant contribution periods, if an employee’s pay surpasses the maximum of ₹21,000, they are still considered employees until the conclusion of that contribution period. As a result, the contribution must be taken out of the total salary received and paid.
On the ESIC website, you can view the latest news about the ESI. The government updates the rate of contributions that both the employee and the employer are required to make and they regularly post it on its website.
Can I Withdraw My ESIC Amount?
An insurance scheme called the ESI scheme accepts contributions from both employers and employees to cover the cost of the premiums. The ESI fund amount cannot be withdrawn for personal use; you only can utilise it for medical costs or other ESI scheme benefits. The ESIC funds can only be applied to the different ESIC benefits offered under the ESI scheme.
Documents Required for ESI Registration
There is no need to submit any physical documents because the registration process is done online. The following documents must be submitted in order to register online:
- Registration Certificate obtained under the: Factories Act and Shops and Establishment Act
- Certificate of incorporation of the establishment, which are as followed
- Company Registration Certificate
- A partnership deed will also be needed in the case of a partnership firm.
- GST certificate
- Memorandum of the Association & Articles of Association of Company
- Establishment Address proof
- Bills (Electricity bill, gas connection bill, or telephone bill of the company)
- Rental agreement of the Establishment, if it’s on rent
- Property tax receipts of the land on which the establishment is located
- All employees list working in the establishment
- PAN Card of the business establishment and also of employees working in the establishment
- The compensation details of all employees
- Canceled cheque from the account of the company
- Directors list of the company
- Shareholders’ list of the company
- A register having the attendance of the employees.
Benefits of ESIC Registration
The benefits of registering under this scheme are various. Some of them are as follows:
- Sickness benefits at a rate of 70% (in the form of salary), for any illness that is certified and lasts for a maximum of 91 days in any year
- Medical benefits are given to an employee and his family members
- Maternity benefits are provided to women who are pregnant (paid leaves)
- If an employee passes away while at work, 90% of his or her salary will be paid to their dependents in monthly installments after the individual’s passing
- In the case that the worker has a disability
- Funeral expenses are given
- Old-age medical care expenses are also given.
Conclusion
To stay updated with the Latest news about the ESI , make sure to stay tuned to our blog. Also, if you are a small business owner with 10 or more employees in your team that earn less than ₹21,000/month, then our expert team at Vakilsearch can help in getting your ESI registration done seamlessly in as low as 12 days. So, what are you waiting for? Start your ESI registration process with Vakilsearch today!
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