ESI Compliance for Restaurant Staff

ESI (Employee's State Insurance) offered by the ESIC (Employee's State Insurance Corporation), is a government run program that allows employees earning below Rs.15,000 per month, to access ESI hospitals and several government run hospitals for free treatment. For the restaurant industry, any business that employs more than 10 people (even if some of them are non-permanent and some of them earn more than 15K per month - essentially 10 includes all those employed by you, including the manager, chef etc. not just labour), is legally required to offer the ESI benefit to the employees. There was some confusion if the minimum number of employees needed for compliance is 10 or 20, but I have confirmed that for restaurants the number is 10.

While we always keep throwing brickbats at the government and complain about inefficiencies, the ESIC department seems to have made some significant improvements in the quality of services and the ease with which a company can enroll and comply to the legal requirements. I would urge business owners to visit www.esic.in. By visiting an ESIC office, you can easily enroll in the ESI scheme and pay your monthly dues and file your employee details statement online. There are some small fees payable during the enrolment process (both official and perhaps a small amount unofficially).

Once your business in enroled and you obtain a ESI number, you can enter your employee details and instantly generate temporary Pehchan cards (ESI ID Cards) with a unique number. The employees will then have to go to the ESIC office, get their photographs taken and collect their permanent Pehchan cards. The good thing now is that these Pehchan cards are now transferable - i.e. if a new employee joins your company and already has a Pehchan card, you can simply enrol him using his existing Pehchan number.

The cost to the business in providing this benefit to employees is equal to 4.75% of the employee's gross salary (Please note: The amount is based on the Employee's Gross Salary and not Basic like in the case of PF). In addition, you will need to deduct 1.75% of the employee's gross salary as the employee's contirbution towards ESI. The amount needs to paid on a monthly basis alongwith employee details statement that needs to filed online every month.

From what I have heard the quality of service at the ESI hopsitals has improved significantly and is a boon, especially for worker's who have had serious health issues.

For a change, it is time to congratulate the government (specifically the ESIC department) for some great progress made and I sincerely hope they keep and improve the services offered by ESIC. Hopefully business owners will slowly start seeing the benefits of the ESI scheme and will want to offer the benefit to employees rather than simply seeing ESI as another statutory obligation they need to comply with for the sake of it.