A Comprehensive Guide to ESI Policy: What Every Employee Should Know

ESI stands for Employee State Insurance and is one of the most critical social security schemes in India. Its primary objective is to support employees financially in case of sickness, disability, maternity, and workplace-related injuries. The ESI policy offers medical and financial benefits to employees and their families. Its operations are under the Act known as the Employee State Insurance Act of 1948, whereas the administration is done by the Employee State Insurance Corporation (ESIC) under the Ministry of Labour and Employment. In this blog, we will understand ESI policy details, several ESI leave policy, and other ESI policy. 

ESI Policy
Employees' State Insurance scheme

What is ESI Policy?

Only workers with a monthly salary of 20,000 can avail ESI benefits and employers with more than 10 employees have to register for ESI. However, depending on the different areas, in some states the limit is 20, and for disabled employees, the maximum salary limit is 25,000. ESI policy is applied to all industries such as Corporate companies, Hotels, Transport, Restaurants, Shops, and many more. It requires the contribution of both the employer and the employee. According to the ESI scheme the employee has to contribute 0.75% of their wages and the employer contributes 3.25%. These contributions are deducted automatically from an employee’s salary and paid to the ESIC. It is the employer’s responsibility to ensure that such contributions are paid in a timely manner. Employees earning less than 100 Rs per day are free from paying their share for ESI. Initially, the ESI leave policy was implemented for only two industrial centres which were Kanpur and Delhi. However, now it has spread worldwide and implemented over 830 centers.

Benefits under the ESI Scheme

The key benefits provided by the ESI Leave Policy are as follows:

  • Sickness Benefit
  • Maternity Benefit
  • Disablement Benefit 
  • Dependants Benefit
  • Medical Benefits 
  • Funeral Expenses
  • Unemployment Allowance

 

Let’s understand each in detail:

ESI Policy

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Employees' State Insurance scheme

  • 1. Sickness Benefit

    Under this ESI leave policy the insured person will be paid 70% of their daily wages for a maximum of 91 days in a year during their sickness. Enhanced Sickness Benefit: Full amount is paid to the employee for 14 days in case of tubectomy and for vasectomy the salary is paid for a maximum of 7 days. The Extended Sickness Benefit: This ESI policy provides the benefit of extending your leave up to two years in case of long-term disease or other serious injury. You will be paid 80% of your average daily wages.

  • 2. Maternity Benefit

    Under the ESI maternity leave policy, women are paid 100% for at least 12 weeks and in case of miscarriage, they are paid for 6 weeks. Based on the different organizations different benefits are provided some companies provide wages for 26 weeks while some provide wages for 12 weeks. Leaves can be extended for a further one month in case of other serious issues during pregnancy.

  • 3. Disablement Benefit

    Under the disablement benefit, in the times of disability caused during work, employees are allowed to avail benefits of either: Temporary Disablement Benefit(TDB): It means the employee gets 90% of their salary during their recovery until they are fit to return their work. Permanent Disability Benefit (PDB): If the employee gets a permanent injury during work they get 90% of their salary as compensation for lifetime.

  • 4. Dependents' Benefit

    In case the insured employee dies due to work related accident, 90% of the salary is issued to their family member. There are dependents like spouses, children, and even parents who receive monthly financial compensations. For example, the amount is paid to the widow until she re-marries again or for her whole life if does not remarry. The child of the dependent is also paid until he/she is 25 years. Moreover, if the insured employee dies during treatment, all the medical expenses and rehabilitation of dependents are handled.

  • 5. Medical Benefits

    One of the crucial benefits provided by ESIC is Medical Benefits. Insured people and their family members get full medical care from the first day he/she enroll in the ESI policy. Esi leave policy provides all the medical care to the insured person which includes primary OPD services to super specialty services. Retired and permanently disabled persons can also get medical benefits. Consultations and other medical check-ups are done at the ESI dispensaries or hospitals.

  • 6. Retirement Benefit

    When an insured person who leaves employment after reaching a certain age or retires under the voluntary retirement scheme are also eligible for medical benefits. If the insured person expires, their partner can get their medical benefits for the certain period until which the payment was made.

  • 7. Funeral Costs

    ESIC also covers the funeral costs which are paid to the family member of the insured person. Around 15,000 is paid to the dependents of the insured employee which is transferred within 2-3 days to cover the hospitalisation and ceremonial expenses. It helps them to manage immediate costs for funeral expenses towards their beloved with ease.

  • 8. Unemployment Allowance

    If the employee lost their job due to certain reasons like closure of factory, retrenchment, or permanent disablement, the employee shall be paid unemployment allowance for a maximum period of twenty-four months. The allowance is paid periodically till the insured person finds employment.

ESI Policy

Conclusion

ESI policy thus acts as a good helping hand towards the employees in providing health care and financial assistance during hard times. Every employee should be aware of the ESI policy and the various benefits they can get from it, to ensure that they get all the required assistance during health-related issues, injury, and maternity.

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