LATEST ESIC UPDATES W.E.F. 1ST OCTOBER 2019
CategoriesESINo Commentson Latest ESIC Updates w.e.f. 1st October 201913,787 viewsShare
What is the ESI Act of 1948?
The Employee State Insurance Act of 1948 provides social security that Indian employees can avail of in certain health-related occurrences during the employment period. It’s self-financing and contributory in nature. This Act aims to protect the employees, who are registered under the Act, against health eventualities that the employees are generally exposed to, like sickness, maternity, disablement- temporary or permanent, or death due to employee injuries. This Act also includes providing medical care to family members.
The fund contributed to this Act, by the employees and the employers payable monthly at a specified rate of the Wages/Salary/Pay, are managed by the ESIC (Employees’ State Insurance Corporation).
ESI Contribution Rate w.e.f. 01.07.2019:
- By the Employer: 3.25%
- By the Employee: 0.75%
Earlier the ESI Contribution Rate was 4.75% for Employer whereas 1.75 % for Employee.
There are 6 social security benefits provided to employers under this Act:
1. Medical Benefit
2. Sickness Benefit
- Extended Sickness Benefit
- Enhanced Sickness Benefit
3. Maternity Benefit
4. Dependants Benefit
5. Disablement Benefit
6. Other Benefit
- Funeral Expenses
- Vocational/Physical rehabilitation
- Old-Age Medical Care
Read Here: Nagaland Minimum Wages (W.E.F June 2019)
ESI Eligibility
Employees with monthly wages of Rs.21,000 and below are covered in this Act. Earlier, the wage limit was Rs.15000 which was increased to Rs.21,000 from 2017.
Employees with daily average wages not exceeding Rs.176 are exempted from paying employee ESI contribution.
The scheme applies to factories and other establishments stated under the Act and notification issued by the Government.
Salary/Wages/Pay Components for estimating the ESI Contribution
The ESI Contribution is calculated based on the Gross Monthly Salary/Wages/Pay of employee/employer. Gross Salary is employee/employer earning before any deductions made.
Gross Salary includes :
- Basic Pay,
- Dearness Allowance (DA),
- City Compensatory Allowance,
- House Rent Allowance (HRA),
- Incentives
- Attendance and overtime
- Payment for Unsubstituted Holidays
- Meal Allowance
- Uniform Allowance
- Other Special Allowances
It does not include Leave Encashment, Gratuity on Discharge/Retirement, Retrenchment Compensation, Washing Allowance, and Annual Bonus.
Read Here: Kerala Minimum Wage (W.E.F May 2019)
New ESIC Changes w.e.f. 1st October 2019
1. New Employee Enrollment:
The new employee has to be registered online through the ESI portal on the date of appointment and a maximum of 10 days of the Date of Joining, the portal will allow the registration. After 10 days, the portal will not allow the registration. If the new employee is already registered in ESIC then no new number is supposed to be issued as the old card will still work even if there’s a change of job.
Generally, the new employees were enrolled in ESI at the end of the month.
2. ESI Permanent Card for Employees:
The new update allows the employees to get their biometric ESI Permanent Card. They have to visit the ESI Branch Office and complete the formalities and after that, they can collect their cards from their nearest ESI Branch office.
Earlier, a yellow card was used to be issued that was later replaced by a printed form (e-Pehchan Card) that used to be collected from the HR Department allowing medical benefits from the ESIC Hospitals and Dispensaries. Now the yellow card called ESI Permanent Card is back. Get a printed form (e-Pehchan Card) from your HR Department and submit to ESIC Office. While registering online, you’ll be able to see the last date to get your card with the complete address of the ESIC Office you have to reach to get your biometric registration.
The benefit of this Permanent Card is that whenever you change your job, you can still use the same ESI Card to avail of the medical facilities provided under the ESI scheme.
3. ESI Contribution Deposit Period:
The ESI Contribution must be deposited within the due date. And the maximum days are 42 days from the end date of contribution period in which you can deposit the contribution against the employee because, after the due date, you’ll not be able to deposit as the portal will restrict you from doing so.
Earlier the ESI Contribution against the employee was supposed to be deposited within the next 15 days of the next month of the due date. After which you were still able to deposit with paying some penalty and interest. But the latest ESIC update restricts you from doing so.
4. Exemption of Wage Contribution Update:
According to the Code on Wages, the National Minimum Wage was revised to Rs.176 per day which is not legally binding on States. Taking this into consideration, the ESI department has stated that if any employee daily wage is less than Rs.176, they don’t have to pay their employee ESI Contribution. Their contribution will be instead paid by the Government. But the employer still has to pay their share contribution.
Earlier the exemption limit for payment of employee contribution was Rs.137 per day.
If you face any issue regarding ESI then consult with ESI PF Consultant in Delhi.