Legal Requirement for Employee Share

• The employee’s share in ESIC is legally mandatory under the ESIC Act.
  
• It applies to all employees earning up to the prescribed wage ceiling.
  
• The contribution rate is fixed at 0.75% of gross wages.
  
• It is automatically deducted from the employee’s monthly salary.
  
• The employer is legally obligated to deposit this amount on behalf of the employee.
  

Exemption in Special Cases

• Employees earning less than ₹176 per day are exempt from their share.
  
• In such cases, only the employer’s share of 3.25% is payable.
  
• The exemption supports ultra-low-income workers.
  
• This rule is uniformly applied and not optional for employers.
  
• The exemption status must be updated if wages increase beyond the limit.
  

Contribution from Eligible Employees Only

• Only employees earning up to ₹21,000 per month are required to contribute.
  
• For persons with disabilities, the wage limit is ₹25,000 per month.
  
• If wages cross the limit mid-period, contributions continue until the period ends.
  
• Employees above the limit are not required to pay the 0.75% share.
  
• Employers must monitor and adjust contributions based on wage changes.
  

Employer’s Responsibility for Deduction

• The employer is responsible for calculating and deducting the employee’s share.
  
• Non-deduction or late payment of the deducted amount is a legal violation.
  
• The deducted share must be remitted along with the employer’s portion.
  
• ESIC compliance requires proper payroll recording of these deductions.
  
• Failure to comply may result in interest, penalties, or inspections.
  

Impact of Non-Contribution on Employees

• Employees not contributing are ineligible for ESIC benefits.
  
• Non-compliance may lead to disqualification from medical and cash support.
  
• Contribution records are required for benefit claims and identification.
  
• Regular contributions ensure coverage in cases of illness, maternity, or injury.
  
• Participation strengthens access to long-term social security protections.