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Featured: Allerg ies Ba ck t o School eH ow Now Blo g eHow Healthcare Spine HealthDisc PainWhat Is ESI in Salary?

W hat Is ESI in Salary?W hat Is ESI in Salary?W hat Is ESI in Salary?W hat Is ESI in Salary?

ESI re fer s to th e Em ploy ees ' S ta te In sura nce schem e of In dia . In tr oduced in 1952, th e ESI

was developed to protect the welfare of Indian employees. Through paycheck contributions,

the ESI offers benefits in Social Security and health insurance for both employees and their

dependents. Both employees and their employers share in ESI contributions, with amounts

determ ined by a fixed percentage of each employee's salary .

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Indian workers have enjoyed ESI benefits since 1952.

History

The ESI Act of 1948 opened the door for workers' benefits across India. Within

four years, the ESI scheme was introduced. Initially, the scheme was offered to

industrial factory workers in the cities of Kanpur and Delhi. Factory workers

represented a group of employees at high risk for occupational hazards,

temporary disability and other benefits the ESI scheme offered. At the time of

publication, the ESI scheme has grown to encompass Indian workers in several

cities and occupational fields across the country.

Benefits

The ESI scheme serves two primary roles for Indian workers. As an insurance

package, it provides workers and their dependents with health insurance and

medical care. It also protects workers against injury, sickness and work-related

hazards that may cause a worker to miss work time. The other function of the

ESI scheme is to provide supplemental payments to workers and their families

when work is missed as a result of disability, death or an injury sustained on the

ob.

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Cont r ibut ion Levels

As of 2011, contributions made to the ESI scheme are based on a fixed rate of the

employee's salary. The scheme requires a 1.75 percent contribution from the

employee and a 4.75 percent contribution made by the employer. Combined, the

ESI scheme contributions total 6.5 percent of each employee's salary.

Contributions are made at the time of each paycheck. Low-income earners,

which include those whose wages total 70 rupees or less per day, are exempted

from making the employee contribution.

Benefit P eriods

ESI benefits are funded with contributions made prior to the commencement of

the benefit period. The calendar year is broken down into two benefit periods. The

first period is funded from April 1 to September 30, with benefits received on

January 1 through June 30 of the subsequent year. The second benefit period is

funded from October 1 to March 31, with benefits received on July 1 through

December 31.

References

ABCDs of Government: Employee State Insurance

Employee State Insurance Corporation: About Us

Employee State Insurance Corporation: Employees Guide

Employee State Insurance Corporation: Contributions

Employee State Insurance Corporation: Benefits

Photo Credit Stockbyte/Stockbyte/Getty Images

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