This document outlines the responsibilities and procedures for employers regarding the Employees' State Insurance (ESI) scheme in India. It details requirements such as registering factories and establishments, completing declaration forms, submitting returns, assisting with contributions, maintaining employee records, reporting accidents, and more. It also provides information on ESI scheme coverage, contribution rates, available benefits including medical care and maternity benefits, and penalties for non-compliance.

1. OVERVIEW
-By Jagdish Kandpal

2. To seek registration of Factories and Establishments
To complete declaration Form – for the safety of company and employee
To submit declaration for and return in Form 3 in duplicate
To assist the Corporation in case of half yearly and monthly contribution.
To arrange the identity cards for the Employees and issue IP numbers.
To issue certificate of Employment
To issue certificate of contribution rate on leaving employment
To pay interest and damages on contribution due but not paid in time
…….Contd.2

3. To maintain register of Employees i.e. attendance, IP nos, Form 7, Medical
Register etc.
To furnish particulars in respect of absenteeism of an insured person during
the working period.
To maintain accident book under act, as prescribed
To send a report of accident within specified period i.e. 24 hour of accident
took place.
To arrange first aid appliances / facilities at prescribed place.
To furnish further particulars of accident
To report death if it is by employment injury
To maintain inspection book, as prescribed
Not to take punitive action during sickness period

4. 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.

5. The ESI Scheme is being implemented area-wise
by stages. The Scheme has already been
implemented in different areas in the following
States/Union Territories
STATES
All the States except Nagaland, Manipur, Tripura,
Sikkim, Arunachal Pradesh and Mizoram.
UNION TERRITORIES
Delhi, Chandigarh and Pondicherry

7.  Drawing wages up to Rs. 15,001/- per month called
gross salary
 Engaged either directly or through contractor
RATE OF CONTRIBUTION OF THE
WAGES
 Employers’ @ Rs. 4.75 %
 Employees’ @ Rs. 1.75 %

8. No.of implemented Centers 677
No.of Employers covered . 2.38 lacs
No.of Insured persons 85 lacs
No.of Beneficiaries 330 lacs
No.of Regional offices/SRO’s 26
No.of ESI Hospitals / Annexes 1453
No.of Penal Clinics 2950

9. 

10.  The total amount of contribution (employee’s share
and employer’s share) is to be deposited with the
authorised bank through a challan in the prescribed
form in quadruplicate on or before 21st of month
following the calendar month in which the wages fall
due.

11. Medical. Sickness, extended sickness for
certain diseases, enhanced sickness,
dependents maternity, besides funeral
expenses, rehabilitation allowance,
medical benefit to insured person and his
or her spouse.

14. TO BE DEEMED AS WAGES
•Basic pay
•Dearness allowance
•House rent allowance
•City compensatory allowance
•Overtime wages (but not to be taken into
account for determining the coverage of
an employee) under implimented ESIC
Act 1948 in 2010.
•Payment for day of rest
•Production incentive
•Bonus other than statutory bonus
•Nightshift allowance
• Payment for un-substituted holidays
• Meal / food allowance
• Suspension allowance
• Lay off compensation
• Children education allowance
• Heat, Gas & Dust allowance
NOT TO BE DEEMED AS WAGES
• Contribution paid by the employer to any
• Sum paid to defray special expenses
• Gratuity payable on discharge
• Pay in lieu of notice retrenchment
• Benefits paid under the ESI Scheme
• Encashment of leave
• Payment of Inam which does mean part
of employment
• Washing allowance for livery
• Conveyance Amount towards
reimbursement for duty related journey

15.  Twice in a year.
BENEFIT PERIOD
If the person joined insurable employment for the first time, say on 5th
January, his / her first contribution period will be from 5th January to
31st March and his corresponding first benefit will be from 5th October
to 31st December

16.  Maternity benefits are available under the provisions of ESI
Act. Duration of maternity benefit is 12 weeks in case of
normal delivery and 6 weeks in case of miscarriage. The
period can be extended by 4 weeks on medical advice.
 Maternity benefit is available subject to the condition of
payment of contribution for a minimum of 60 days in one or
two consecutive contribution periods and the rate of payment
is double the standard benefit rate i.e. approximate full
wages. The can be claimed on the basis of medical certificate
issued by the dispensary which has to be deposited in local
office and local office will make payment.

17. i. Attendance Register in respect of all the employees including employees engaged
by immediate employer / contractor
ii. Wage Register
iii. Register under Regulation 32
iv. Accounts Book
v. Cash Book / Books of Account ledgers, petty cash book including bills and
vouchers
vi. Other relevant records to show the labour charges paid to the labour engaged in
construction, repair & maintenance etc.,
vii. Inspection Book
viii. Form 7 monthly contribution particular of relevant employees details
Note : Most of the forms are supplied by the
ESI
Local office with free of cost

18.  Different punishments have been prescribed for different types of
offences in terms of Sec.85 (i) (six months imprisonment and fine
Rs. 5000/-), (ii) (one year imprisonment and fine), and 85-A: (five
years imprisonment and not less to 2 years) and 85-C (2) of the ESI
Act, which are self explanatory. Besides these provisions, action also
can be taken under section 406 of the IPC in cases where an
employer deducts contributions from the wages of his employees but
does not pay the same to the corporation which amounts to criminal
breach of trust.