Employees State Insurance (ESI) Scheme

What is ESI Scheme?

It is a comprehensive social security scheme designed to accomplish the task of socially protecting the employees in the organisation against the events of sickness, maternity, disablement, and death due to employment injury and to provide medical care to the insured employees and their family.


Under Section 2(12) the Act is applicable to non-seasonal factories employing 10 or more persons.

Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatres, road-motor transport undertakings and newspaper establishments employing 20* or more persons.

Further under section 1(5) of the Act, the Scheme has been extended to Private Medical and Educational institutions employing 20* or more persons in certain States/UTs.

*Note: 14 State Govts. / UTs have reduced the threshold limit for coverage of shops and other establishments from 20 to 10 or more persons. Remaining State Governments/UTs are in the process of reducing the same.

The existing wage limit for coverage under the Act is Rs. 15,000/- per month ( w.e.f. 01/05/2010).


How does the scheme helps employees’?

The scheme provides full medical care to the employee registered under the scheme during the period of his incapacity for restoration of his health and working capacity. It provides financial assistance to compensate the loss of his/her wages during the period of his absentation from work due to sickness, maternity and employment injury. The scheme provides medical care to his/her family members also.


Who administers the ESIC scheme?

The ESI Scheme is administer by a corporate body called the ‘Employees State Insurance Corporation’ (ESIC) which has members representing the employers, employees, the Central Government, The State Government, Medical Professional and the Parliament. The Director General is the Chief Executive Officer of the corporations and is also an ex-officio member of the corporation.


Registration Procedure

Is it mandatory for an employer to register under the scheme?

Yes, its statutory responsibility of the employer under Section 2-A of the Act read with regulation 10-B, to register their Factory / Establishment under ESIC Act within 15 days from the date of its applicability to them.


What is the procedure for registration of an employer?

The Factory or Establishment to which the Act applies is to be registered by submitting an Employer’s registration form  (Form -01)  to the concerned Regional office and obtain an identification number called  the Code number  (Section 2(A) read with Regulation 10-B).


What are the documents to be submitted along with the Employer’s registration form?

Documents relating to the constitution of the Factory/Firm/Establishment/, evidence in support of the date of commencement of production /business, list of partners / directors with their address, address proof like pan card / passport/voter identity card/ month wise employment position etc. are the essential documents.


To know more about ESIC please click here