ESI stands for Employees’ State Insurance. It is a government-managed social security and health insurance program for workers in India, established under the Employees' State Insurance Act, 1948. The scheme is managed by the Employees’ State Insurance Corporation (ESIC), under the Ministry of Labour and Employment.

Key features of ESI:

• Eligibility: Applicable to employees earning ₹21,000 or less per month (₹25,000 for persons with disabilities), working in establishments with 10 or more employees in most states (20 in a few states).

• Contributions: The combined ESI contribution rate is 4% of an employee’s wages—0.75% paid by the employee and 3.25% by the employer. These rates became effective from July 1, 2019.

• Coverage: ESI provides a range of benefits to eligible workers and their families, including:

  • Comprehensive medical care and hospitalisation

  • Sickness benefit (cash compensation during medical leave)

  • Maternity benefits (paid leave and medical care for childbirth/adoption)

  • Disability benefits (monthly wage compensation for temporary/permanent disability)

  • Dependents’ benefits (pension to family if death occurs due to employment injury)

  • Funeral expenses and rehabilitation allowances.

How it works:
The employer deducts the employee’s contribution each month and deposits it along with their own share to ESIC. Employees and their dependents can then avail of medical and cash benefits through the ESIC network of hospitals and dispensaries.

Purpose:
The ESI scheme acts as a vital safety net, protecting employees and their families from financial distress due to sickness, employment injuries, maternity, and other specified circumstances.

Official site for more details: https://esic.gov.in