The central government has revised the Employee State Insurance applicability norms for employees.

Effective 1 May 2010, units which are under ESIC coverage will have to start making ESI contributions for all employees whose gross monthly wages are Rs. 15,000 or below. Earlier ESI contributions for entities under coverage was mandatory for only those employees whose monthly gross wages were Rs. 10,000 or below.

The amended notification was released by the ministry of labour and employment on 28 April 2010. This is a positive step that will benefit thousands of employees who will now have access to various benefits provided by the Employee State Insurance Corporation (subject to conditions):

  1. Medical Benefits
  2. Sickness Benefits
  3. Maternity Benefits
  4. Disablement Benefit
  5. Dependants’ Benefits
  6. Funeral Expenses

In addition, the scheme also provides some other need based benefits (subject to conditions) to insured workers such as:

  1. Rehabilitation allowance
  2. Vocational Rehabilitation
  3. Unemployment Allowance (Under Rajiv Gandhi Shramik Kalyan Yojana)

This notification will however lead to higher costs for employers as they will need to bear 4.75% of Gross Wages for the additional employees who will come under coverage, as employer contribution towards overall ESI contributions.
(Employee contribution is 1.75% of Gross Wages.)

Team eVetan