Hiring In India: Insurance Policies for Employers
In India, employers with more than 10 employees are required to contribute to the Employee's State Insurance (ESI) scheme, which provides medical and cash benefits to employees in case of sickness, maternity, or employment injury. The employer contribution rate to ESI is 4.75%, while the employee contribution rate is 1.75%.
Here is a more in-depth look into the insurance details and insurance coverages.
Insurance details
Employer Payroll Contributions
|
12.00% |
Employee’s Provident Fund (EPF) and Employee’s Pension Scheme (EPS) (Compulsory for employers with more than 20 employees & a maximum monthly salary of 15,000.00 INR) |
|
|
4.75% |
Employee’s State Insurance (ESI) (Compulsory for employers with more than 10 employees) |
|
|
16.75% |
Total Employment Cost |
|
Employee Payroll Contributions
|
12.33% |
Employee’s Provident Fund (EPF) and Employee’s Pension Scheme (EPS) (Compulsory for employers with more than 20 employees & a maximum monthly salary of 15,000.00 INR) |
|
|
1.75% |
Employee’s State Insurance (ESI) |
|
|
4.00% |
Health and Education Cess (levied at the rate of 4.00% on the amount of income-tax plus surcharge) |
|
|
18.08% |
Total Employee Cost |
|
Group term life insurance covers all members of the company or association, with premium payments managed by the employer and collected from employees' monthly salaries.
Employers commonly opt for group health insurance, known as group mediclaim, to protect employees' health and provide financial aid during health emergencies, including hospitalization.
Group personal accident insurance provides coverage for accidents occurring during employment, including compensation for accidental death, medical expenses, and permanent or partial disability coverage for employees' family members or dependents.
For group travel, employers can secure group travel insurance, covering health, accidents, and liability, ensuring employees' protection during business trips, including coverage for luggage loss, medical emergencies, accidents, and third-party liabilities.
Global insurance plans may include workmen's compensation insurance, mandated by the Employee Compensation Act, covering employers' statutory liabilities in case of worker death or injury during employment accidents.
The Insurance Coverage
According to maternity leave policy in India, expectant mothers are entitled to 26 weeks of paid maternity leave for the first two children and 12 weeks for subsequent children, as per the Maternity Benefit Act of 1961. Employers in India must provide insurance coverage during the maternity leave period. Eligibility requires 80 days of employment in the preceding 12 months.
Eligible male government employees in India can avail of 15 days of paternity leave within six months of childbirth or adoption. Paternity leave is separate from other types of leave, and insurance coverage must be provided by the employer during the paternity leave period.
