The Employees’ State Insurance Corporation or ESIC is a statutory corporate body set up under the ESI Act of 1948, which is responsible for the administration of ESI Scheme. The ESI scheme is a self-financing social security scheme that protects the employees covered under it against financial distress due to sickness, disablement or death due to work-related injuries. The ESI releases circulars regarding new ESI updates every few months. We keep an up to date track of such circulars for employer-employee knowledge.
October 2019 ESI Updates
1. New employee registration within 10 days
Ideally, an employee must be added to the ESI subscription on the day that he joins. But this is not usually the case. In most cases, the new employees are added to ESI at the end of the month, when salary calculations are being done. But the new ESI update states that new employees have to be registered to ESI within 10 days of their joining the company. Thereafter, it will not be possible to add new employees to ESI. Since the ESI portal itself will not accept the new registration post 10 days.
2. ESI contribution to be done within 42 days – Cut off date
Generally, the ESI contribution of one month has to be paid by the employer latest by the 15th of the succeeding month. Exceeding this due date results in the payment of penalty and interest on the employer. But the new ESI updates state that this monthly ESI payment can be done latest within 42 days from the contribution period. That means payment of September month can not be done after 11th November. The Same has already been implemented and an official circular has also been circulated. Once this date is passed, employers will not be able to make online ESI payments. An alternative payment method for this has also not been given yet.
3. Average daily wage revision as per Code on Wages
In the Code on Wages it was stated that the National Minimum Wages would be Rs 176. Hence, the ESI department has stated that employees with a minimum wage of less than Rs 176 per day, do not have to give their ESI contribution. Their ESI contribution would be paid by the government on their behalf. The employer contribution though would be paid by the employer as normal. So the notice on the ESI portal states that “Revised exemption of contribution for average daily wages of Rs 176 or less has been made effective from 1st September 2019”. Thus, the employee’s contribution to October challan would be considered zero. The earlier average daily wages were Rs 137.
4. ESI ID Card issue for employees
ESI would earlier issue an ESI Pehchan Card for member identification. This was later replaced with a printed form with the employee’s picture attached. This was then used by employees to get medical benefits at ESI hospitals and dispensaries. This format has again been replaced by an ID card. All employees will now have to visit their ESI branch office and get their ESI ID Card issued.
Our video below gives a breakdown of the new ESI updates.
November 2019 ESI Updates
As previously stated in the October new ESI updates, employers will have to register new employees to ESI within 10 days of joining the company. Failure to do so will make it impossible to add new employees to ESI thereafter. Additionally, employers have to generate the challan and do payments for any contribution period within 42 days of the end of the period. Failure to do so will leave the employee with no ESI contribution.
The solutions given by ESI to the problems arising out of these updates
If employers try adding new employees after 10 days on the ESI website, then they will receive a pop-up notification. According to this notification, you will receive the show-cause notice on your email id along with a proforma. Employer will then need to fill up the proforma and submit it in your regional ESI office within 15 days of the notice. If the submission extends beyond 15 days then the employee’s date of joining will be taken the same as his date of ESI registration. The proforma contains all details which employer fills on the ESI website when registering the employee to ESI. Furthermore, a site visit will be done to confirm the new employee’s date of joining. Only after all these steps are complete, will the new employee’s ESI registration be complete.
What will be the impact of this solution?
- The ESI solution is highly impractical. In the real scenario, some new employee is joining every other day. In such cases, the employer will be stuck with just registering the new employees to ESI. Additionally, most new employees do not even bring in their documents within 10 days. There is also a high chance of new employees leaving on short notice. Thus, their ESI registration would be redundant.
- When we are moving towards a digital India, having a physical proforma to fill up is unnecessary. It is an additional and redundant task which consumes the employer’s work hours.
- ESI department has always complained of being under-staffed. Hence, the idea of doing site visits to confirm employee documents seems fishy. A number of documents are also necessary to be shown at the site visits. This will just end up adding to corruption in our bureaucracy. Ultimately the employee and employer will suffer and hence the industries of the country will suffer.
Watch the video on the new ESI updates in detail below.
February 2020 ESI Updates
The ESI contribution rate was reduced from 6.5% to 4% in 2019. The reason for this given by the Labour Minister was that the ESI department was receiving a lot of contribution but failing to utilize it efficiently. Hence, they wanted to reduce the burden of contribution. It would in no way affect the benefits given to the IPs though. The promise given has failed since the central ESI office released a circular recently. This circular states that the IPs will not be referred to private hospitals for secondary treatment.
No secondary treatment in private hospitals
Secondary treatments are for those locations where there are either no ESIC hospitals or the ESIC hospitals are insufficient for functioning. Therefore, if any ESIC hospital had fewer beds, then the extra patients would be referred to a private hospital. Which is the case in most places in our country. But the new decision states that secondary treatment will be given at government hospitals itself. Due to cost-cutting reasons. ESI states that they will not refer patients for an illness of bone, eye, pediatric or gynaecological reasons. Only illness due to brain, heart, cancer and kidney will get referred to super speciality hospitals. All the rest will get treatment in either ESI dispensary or hospital. If the ESI dispensary/hospital is absent or at full capacity in your location, then you will get referred to a government hospital.
But government hospitals already provide their services free of cost in most cities. Thus, what is the benefit of making monthly ESI contributions for employees, when they can avail the same services free of charge.
Watch and share the below video on this update with the #ESICGiveUsJustice to raise your concern over this unfair update.
March 2020 ESI Updates
ESIC return date extended due to COVID-19
A new notification was released on 16th March 2020. Due to the ongoing COVID-19 scare which has caused the whole world including India to go into a lockdown state, companies have been closed and employees have been unable to go to work. Hence, ESIC has given employers an extension for filing ESI returns for February and March 2020. Earlier, it was compulsory to file February ESI returns before 15th March 20202 to avoid any penalty. But now this deadline has got an extension of 45 days instead of 15 days. So ESI contribution for February can be paid by 15th April and for March can be paid by 15th May.
There is a confusion regarding the March ESI filing deadline. since an earlier notification asked March payments to be made within 42 days. So it is suggested to complete March filing within 10th May just as a precautionary measure. Read the full notification below.
One-time relaxation for employers
The next circular dated 18th March 2020 notified employers of a one-time relaxation for those who had not filed ESI contribution for the period of April 2019 to September 2019. As mentioned earlier, each monthly ESI contribution has to be paid within the next 42 days. If unable to do so, then the employer would be unable to make or pay any pending challans. After requests from the public, ESIC has given a one-time relaxation to complete any pending contribution for the duration of April 2019 to September 2019, within 15th May 2020. Read the full circular below.
New employee registration rules
The ESIC online portal now states that employee registration will require submission of their mobile number and bank account details. This may be a disadvantage if an employee does not have his bank account details readily available. But it may have an advantage of employees getting direct bank notifications of ESI amount credit to their accounts.
Watch the video on these latest ESI updates below.
April 2020 ESI Updates
The Employees’ State Insurance Corporation headquarters released its latest notification on 14th April 2020. This is important for both employees and employers. The main topics of discussion were as follows:
1. ESI challan filing date extension
Generally, any given month’s ESI challan submission must be done by the 15th of the next month. But due to the ongoing nationwide lockdown, ESI has relaxed the submission dates. February 2020 challan submission can be done by May 15th 2020. Furthermore, March 2020 challan submission can be done by May 15th 2020. No interest penalty will be applicable on challan submitted during this time. Although, ESI registration for any new employee must still be done within 10 days of their joining.
2. Purchase of medicine
Due to the COVID-19 lockdown, travelling to an ESI dispensary or hospital for getting medicines is not possible. Hence, ESIC has given IPs the option to purchase their medicine from their nearby private chemists. ESIC would then subsequently reimburse the IPs for these medicines later. To avail the reimbursement, IPs will have to show the chemist bill. So, keeping the chemist purchase bill safely is very important. Additionally, this is only applicable for medicines which have been prescribed by ESIC.
3. IP treatment from tie-up hospitals
Incase an ESI hospital gets declared as a COVID-19 treatment only hospital, then IPs can be referred to other ESI tie-up hospitals. IPs can avail secondary treatment, super-speciality treatment and admission investigation in these tie-up hospitals. This is valid until the ESI hospital reopens for the general public. Until now, the ESIC hospitals in Ankleshwar and Vapi in Gujarat, Gurugram in Haryana, Udaipur in Rajasthan, Jammu in Jammu & Kashmir, Baddi in Himachal Pradesh, Adityapur in Jharkhand and Joka in West Bengal have been turned into dedicated COVID-19 hospitals.
Find all ESI hospitals in Rajasthan in ESIC Hospitals & Dispensary of Rajasthan (District Wise).
Find all ESI hospitals in Maharashtra in ESIC Hospitals & Dispensary of Maharashtra (District Wise).
IPs can seek any emergency or non-emergency medical treatment from tie-up hospitals directly without any referral letter.
4. Medical benefit of disabled and retired
Under ESIC, permanently disabled IPs receives a medical card under Rule 60-61. This medical card allows them to receive all medical benefits even when they cease to be in insurable employment due to disablement or retirement. A payment of Rs 120 is necessary for receiving this medical card. However, due to the lockdown, some medical cards may expire and IPs may not be able to renew them. In such cases, medical cards will stay valid until 30th June 2020. IPs may renew their expired medical cards thereafter.
5. Early pension
ESIC has credited March’s pension amount early for all disable and diseased beneficiaries. This was done before the due date and totalled to an amount of Rs 41 crore.
Watch the full list of new ESI updates in the video below.
June 2020 ESI Updates
The ESIC released a new circular on 29th June 2020. This circular states that it is now mandatory to enable mobile number and bank account details while registering new employees. Additionally, these details also have to be updated for the older employees. This new rule comes into effect from 1st July 2020 onwards. If while adding mobile number of employee it seems that the number is already linked with another employee then you will receive an OTP for verification. Upon successful verification, mobile number linking will be complete. Similarly, while adding bank account details, if bank account is linked to another employee then it will not get added. Furthermore, the employer will have to scan and upload an attested copy of the employee’s cancelled cheque leaflet’s front page, or passbook page with account holder details.
Old employees have the option to visit the Regional ESI Branch Office and get their bank account details updated. This is possible by producing a copy of front page of employee’s cheque leaflet and getting it attested by the ESIC Branch Manager. Until the bank account details and mobile number are updated, employees will not be able to claim reimbursements or avail cash benefits from ESI.
Read the step by step process in ESI New Employee Registration Process.
Latest June 2021 ESI Updates
As per previous rules, a deceased IP’s family can only receive pension when the IP expiry was due to a work-related injury or accident. This would leave the families of all those multiple workers who passed away due to Covid-19 at a loss. Since they would not be able to receive any pension benefit. This pension would be equal to 90% of the IP’s average daily wage. For example, if the IP’s contribution was around Rs 20,000 on average then his family would receive Rs 18,000 as pension for lifetime.
But as per the latest ESI update, all workers who expire due to Covid-19 will be considered as work-related death and their families will get the pension benefits under ESI. The Labour Ministry and Prime Minister’s Office made a recent press release regarding this. It stated that workers who passed away due to Covid-19 will also have their families eligible for 90% of their daily average wage as lifetime pension. Although this comes with certain terms and conditions.
Eligibility conditions for receiving pension due to Covid-19
- The IP must be registered on the ESIC online portal atleast three months before being diagnosed with Covid-19 resulting in their death.
- The IP must have been employed for wages and contributions for at least 78 days and should have been paid or payable in respect of deceased IP during a period of one year immediately preceding the diagnosis of Covid resulting in death.
The IPs who fulfil the above two conditions and expire due to Covid will have their beneficiaries entitled to receive 90% of their average daily wages of the IP during their life. This scheme will be effective for a period of two years starting from 24th March 2020.
Pension rate calculation
The dependent’s pension would be equal to 90% of the IP’s average daily wage. For example, if the IP’s contribution was around Rs 20,000 on average then his family would receive Rs 18,000 as pension for lifetime.
To find the average daily wage, one needs to know the monthly contribution of the IP in the last ESI contribution period. There are two contribution periods in every year. One is from 1st April to 30th September and second is from 1st October to 31st March of the following year. For the contribution period of April to September, the cash benefit period falls within 1st January of the following year to 30th June. Similarly, for contribution period of October to March, cash benefit period will fall within July to December of the following year.
But in case the IP expires due to Covid before the first contribution period is over then one can refer to ESIC Rule No 58. This states that an IP who sustains employment injury before expiration of the first wage period in the contribution period in which the injury occurs, the dependent’s pension will be 90% of wages actually earned or would have been earned had IP worked for a full day on the date of the accident, rounded to the next higher rupee.
Eligibility conditions for dependent benefit
The deceased IP’s pension benefit will be eligible for the following dependents if he was married:
- If IP was married then the pension will go to his wife, son, daughter and mother.
- The wife will receive lifetime pension of 3/5 of the pension share.
- The mother will receive lifetime pension of 2/5 of the pension share.
- Son will receive 2/5 of the pension share till he reaches 25 years of age.
- The daughter will receive 2/5 of the pension share till her marriage.
But it is important to note here that the sum of each dependent’s pension share cannot exceed the pension rate.
The deceased IP’s pension benefit will be eligible for the following dependents if he was unmarried:
If deceased IP was unmarried then one will follow ESIC Rule No. 58. This states that the pension will go to the following:
- To a parent other than widowed mother or grandparent, for lifetime, at 3/10 of the pension share. If there are two or more parents, other than widowed mother, or grandparents, then the amount payable to parents/grandparents shall be equally divided between them.
- To any other –
- Male dependent until he attains 18 years of age, at 2/10 of pension rate.
- Female dependent until she turns 18 years old or gets married, whichever is earlier or if widowed until she attains 18 years of age or remarriage, whichever is earlier, at 2/10 of pension rate
How to claim the dependent pension?
As of now, ESIC has not given any set procedure to claim this pension. But it is important to be aware of this new ESI update and keep checking the ESI online portal for any information regarding it.
Watch the video below for full information on new ESI updates.
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