ESI Act, 1948
Applicability:
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Establishments with 10 or more employees (threshold may vary in some states)
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Employees earning gross wages of ₹21,000/month or less
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Applicable to factories, shops, establishments, and certain notified sectors
Contribution Rates (w.e.f. July 1, 2019)
| Contributor | Rate | Calculation |
|---|---|---|
| Employer | 3.25% | On gross wages of covered employees |
| Employee | 0.75% | Deducted from employee’s monthly wages |
Due Date for Payment
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ESIC Challan must be paid by the 15th of the following month
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Delayed payments attract interest & damages
Mandatory Compliance & Registers
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Monthly ECR filing (Electronic Contribution Return)
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Accident Register (Form-11)
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Employee Register & Salary Records
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Online submission of returns & challans
Key Benefits under ESI
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Free medical care for employee & dependents
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Sickness benefit: 70% wages for 91 days
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Maternity benefit (paid leave up to 26 weeks)
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Disability benefit: Temporary or permanent
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Dependents’ pension in case of death at work
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Funeral expenses reimbursement
Consequences of Non-Compliance
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Penalty: Up to ₹25,000
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Imprisonment: As per Section 85 of the ESI Act
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Interest: 12% p.a. on delayed contribution
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Damages: Ranging from 5% to 25% depending on default period
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Prosecution: For repeated or willful defaults
Ensure timely registration, deduction, deposit, and filing to avoid legal and financial repercussions.
