ESI stands for Employees State Insurance Scheme is a social security scheme offered by the Indian Government as per the ESI Act, 1948 and ESI is managed by ESIC or Employees State Insurance Corporation, it’s an autonomous body created by the law under the Ministry of Labour and Employment, Government of India. ESIC Scheme is a workers’ compensation plan that provides medical coverage for the insured. Moreover, their dependents are also protected. ESIC provides a number of financial compensations in the event of disability or wage loss. The Scheme provides a pension known as dependent benefit to the insured person’s family members, in the instance of injury or death caused by occupational dangers while at work.

Establishments, factories, or shops with more than 10 employees who have a maximum basic wages/salary of Rs. 21,000 per month (Rs.25,000 per month in the case of persons with disability) are covered under the ESI scheme and thus, they have to mandatorily register with the ESIC within 15 days from the date of its applicability.

Under this scheme, the employer needs to contribute an amount of 3.25% of the total monthly wage payable to the employee whereas the employee needs to contribute only 0.75% of his monthly wage every month of the year. The only exemption to the employee in paying his contribution is whose daily wage is less than Rs.176/- per day.