Employment State Insurance (ESI) is a social security and health insurance scheme for employees in India. The scheme is managed by the Employees` State Insurance Corporation, a statutory body set up by the Ministry of Labour and Employment, Government of India. ESI provides benefits to employees in case of sickness, maternity, and disablement. It also provides medical care to insured persons and their family members. But the question that arises is, is ESI mandatory for contract employees?
The answer is yes. The Employees` State Insurance Act, 1948, covers contract employees who are working in establishments falling under the ambit of the Act. According to the Act, any employee who is drawing wages up to Rs 21,000 per month is eligible for ESI. This applies to both permanent and contract employees.
It is the responsibility of the employer to register the employee for ESI and contribute to the scheme. The contribution is made as a percentage of the employee`s wages, with the employer contributing 4.75% and the employee contributing 1.75%. This contribution is made to the Employees` State Insurance Corporation.
If an establishment has more than 10 employees and the employees are drawing wages up to Rs 21,000 per month, the employer is required to register the establishment with the ESI Corporation. This applies to both permanent and contract employees. Failure to comply with the Act can result in penalties and legal action.
It is important for employers to note that the ESI Act applies to all employees, including contract employees. Therefore, it is their responsibility to ensure that they comply with the Act and register the employees for ESI.
In conclusion, ESI is mandatory for contract employees who are working in establishments falling under the ambit of the Act. Employers are required to register the employees for ESI and contribute to the scheme. Failure to comply with the Act can result in penalties and legal action. Therefore, it is important for employers to ensure that they comply with the Act to avoid any legal repercussions.