Eligibility under ESI
Any Factory/Establishment/Firm where manufacturing process is carried on and which employs more than 10 persons will come under the coverage of ESI Act and must register with the ESI. Under Sec 1(5) of the Act, the Scheme has been extended to the shops, Hotels, Restaurants, Cinemas including cinema theatres, road motor transport undertakings, newspaper establishments, private medical and educational institutions etc. Thus, in effect, permanent employees, temporary employees in the formal sector and employees in unorganized sector are covered. There must exist an employer-employee relationship by which the employer deducts 0.75% amount from the wages of the employee adds another 3.25% of the employees’ wages and is expected to make the payment to the ESIC. Hence, self-employed persons such as those who run auto-rickshaws, street vendors, etc., will not be covered under the Act. The existing wage limit for coverage under the Act is Rs. 21,000/- per month (with effect from 01.01.2017)