All you need to know about the New ESIC Amendments

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Anotification has been issued by Employees’ State Insurance Corporation (ESIC) Authorities increasing the wage limit of employee covered under the ESIC scheme from the existing limit of Rs.15, 000 to Rs.21, 000 with effect from January 1st, 2017. The new move aims to bring about 50 lakh workers under the ESIC social security scheme and bring affordable healthcare to not just employees but also their dependent family members.

Please click here for more details on the new ESIC changes.

As India’s only fully integrated HR & Payroll Software and Service handling everything Payroll, HR and Compliance related for our 350+ clients , we decided to address the changes made in the new amendment and what it means for all Employers, Employees as well as HR & Compliance Managers trying to wrap their head around these new changes.

If you are looking for help on your ESIC registration and other compliance measures you can sign up with Quikchex  here.

Here’s what you need to know about the recent ESIC amendments and how it affects Employers, HR & Compliance Managers or Employees –

For Company/Employers

Companies that are not Registered Under the ESIC Act

Companies with strength of more than 20 employees whose monthly gross salary falls under Rs 21,000 must be registered under the ESIC Act

Companies already registered under the ESIC Act

Those Companies already registered with ESIC Act need to rework all employees’ CTC, whose monthly gross salary falls under Rs.21, 000.

For HR and Compliance Managers

HR & Compliance Managers are required to identify all employees whose gross monthly salary is up to Rs 21,000. Employees’ CTC is required to be restructured including the ESIC employee and employer contribution. With this new CTC restructuring it is important to note that the Net Take Home monthly salary of employees will come down.

The CTC Restructuring and the changes in the monthly take home salary must be intimated to all employees.

HR Managers and Compliance Managers must get IP numbers enrolled of any new employees covered under the Act at the earliest by linking it with the Aadhaar credentials.

For Employees

This recent amendment would bring about 50 lakh workers and their families under the ESIC scheme. Although the net take home salaries for eligible employees will come down, there are a plethora of benefits that can be availed under the ESIC scheme. Full medical care is provided to the employee and his family members from the day he enters insurable employment. There are no limits on expenditure of the treatment of an employee or his family member. Employees are also eligible for Sickness Benefits form of cash compensation at the rate of 70 per cent of wages is payable to employee during the periods of certified sickness for a maximum of 91 days in a year. In order to qualify for sickness benefit the employee is required to contribute for 78 days in a contribution period of 6 months. Maternity Benefit for confinement/pregnancy is payable for three months, which is extendable by further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding year.

You can also read more about other benefits under the ESIC schemes here .

If you are a HR Manager or CEO looking for help on all things compliance related for your company and would be interested in signing up with Quikchex you can click here and have our Sales team get in touch with you.