ESI Scheme- Applicability

The Employees State Insurance Act, 1948 was enacted with the intention “to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto.” It is applicable to the factories and establishments as defined in the the Employees State Insurance Act, 1948 which has 10 or more employees (varies from State to State). Employees whose monthly wages do not exceed Rs 21,000 are covered under the ESI scheme. This wage slab is revised from time to time.There are penalties prescribed for not complying with the provisions of the Act. With effect from 01.07.2019 contribution payable from the side of the employee is 0.75 % of the wages and that of the employer is 3.25% of the wages due to the employees (paid or payable wages in every wage period).