ESI scheme will apply to organisations with less than 10 employees too

Certain measures are being discussed in the Parliament to add more value to the Employees’ State Insurance (ESI) scheme. While until now only organisations 10 or more were benefitting from this scheme, the same will soon be made available on a voluntary basis, for organisations that have a workforce of less than 10 people too, pan India.

Discussions are also on to make the ESI scheme compulsory for those employed in hazardous industries. Currently, the ESI Act is applicable to establishments having 10 or more employees, in the organised and unorganised sectors. It includes under its purview, non-seasonal factories employing 10 or more persons too. About nine years back, in 2011, its applicability was extended to shops, hotels, restaurants, private medical and educational institutions, cinemas and newspaper establishments that employed 20 or more people.

The ESI benefits are funded by the contributions made by the employers as well as the employees. Complete medical care is provided to the employees registered under the ESI Act, 1948. It offers financial aid to the registered employees to cover the loss of wages during the time they were unable to work owing to health issues, maternity, injuries or hospitalisation. The immediate family members of the employees are also covered under the ESI benefits.

Last year, the income limit for eligibility of medical benefit for the dependent parents of employees registered under ESI was increased from Rs.5000 per month from all sources to Rs.9000 per month.

Employees earning less than Rs 21,000 are covered under the ESI Act, w.e.f December 2016. Until then, the limit was Rs 15,000 per month.

The rate of contribution of employers was brought down from 4.75 per cent to 3.25 per cent, while the employees’ contribution was decreased from 1.75 per cent to 0.75 per cent w.e.f July 2019.