Esi Act

Overview

What is the ESI Act?

The Employees' State Insurance Act, 1948 is a self-financing social security and health insurance scheme for Indian workers. It provides socio-economic protection to workers in case of sickness, maternity, disablement, and death due to employment injury.

The scheme is managed by the Employees' State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labour and Employment, Government of India.

Establishments with 10 or more employees (20 in some states)

Employees earning up to ₹21,000 per month (₹25,000 for disabled)

Covers factories, shops, hotels, restaurants, cinemas, and more

Seasonal workers and contract employees are also covered

Employees in specified hazardous industries regardless of wage

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FAQ

Frequently Asked Questions

Everything you need to know about the Employees' State Insurance Act.

The Employees' State Insurance Act, 1948 is a self-financing social security and health insurance scheme for Indian workers. It provides socio-economic protection in case of sickness, maternity, disablement, and death due to employment injury, managed by the Employees' State Insurance Corporation (ESIC).

Establishments with 10 or more employees (20 in some states)
Employees earning up to ₹21,000 per month (₹25,000 for persons with disability)
Covers factories, shops, hotels, restaurants, cinemas, and more
Seasonal workers and contract employees are also covered
Employees in specified hazardous industries regardless of wage

Employee Contribution: 0.75% of gross wages — deducted from salary
Employer Contribution: 3.25% of gross wages — paid by employer
State Government: 1/8th of the expenditure on medical benefit

Full medical care is provided to insured persons and their family members from the very first day of employment. This includes outpatient, inpatient, specialist, and emergency care through ESIC hospitals and dispensaries across India.

Insured employees are entitled to 70% of their daily wages for up to 91 days during certified illness in a year. An extended sickness benefit of up to 2 years is available for certain long-term diseases at 80% of wages.

ESI provides full wages for 26 weeks of maternity leave for the first two children, and 12 weeks for subsequent children. In case of miscarriage or medical termination, 6 weeks of paid leave is provided.

Temporary disablement benefit is paid at 90% of wages for the period of disability. In case of permanent disablement due to employment injury, a monthly pension is paid based on the extent of disability.

Failure to register: Fine up to ₹10,000
Non-payment of contributions: 12% p.a. interest + damages up to 25%
False statement or representation: Imprisonment up to 2 years or fine
Obstruction of ESIC inspector: Fine up to ₹2,000

ConfluxHR automates ESI contribution calculations, challan generation, and monthly return filings. It ensures accurate deductions based on gross wages, tracks eligibility changes, and keeps your business fully compliant with ESIC requirements.