The Employees State Insurance Act & Scheme ,1948

Presented by:

Rahul MahidaSubject:-Labour Legislation and

social Securities

Background

• Pioneering measure in social insurance in India.

• Health insurance first discussed in 1927 by Indian legislature.

• Originally called “workmen’s state insurance bill” 1946.

• Came into force on 19th April 1948.

Object of the act:

To provide for certain benefits to employees in case of sickness, maternity and injury during employment and to make provision for certain other matters in relation thereto.

Applicability of the Act:

• All factories

• Shops employing 20 or more persons.

• Such other Govt. specified establishments.

Act does not apply to:

• Seasonal factories engaged exclusively in any of the activities like: cotton ginning, cotton or jute pressing, decoration of ground nuts, manufacturing coffee, indigo, lac, rubber, sugar, or tea or any manufacturing process incidental to or connected with any of the afore said activities, and including factories engaged for a period not exceeding seven months in a year in blending, packing or repackaging tea or coffee, or in such other processes as may be specified by the central govt.

• The factories exempted as seasonal from the provisions of the act.

Act does not apply to:

• Mines

• Railway running sheds

• Govt. factories or establishments and Indian naval, military, or air force

• Other Govt. notified exempted establishments

Areas covered• The ESI Scheme is being implemented area-wise by

stages. The Scheme has already been implemented in different areas in the following States/Union Territories

STATESAll the States except Nagaland, Manipur, Tripura, Sikkim, Arunachal Pradesh and Mizoram.

UNION TERRITORIES Delhi, Chandigarh and Pondicherry

Eligibility

• All Employees drawing wages/salary up to Rs.15000/- p.m. engaged either directly or through contractor, are covered under the scheme. W.e.f 1.05.2010.

• Rethinking on enhancement of ceiling limit up to 25000 still in process.

Act Authorisation • 1.  To Promote and measure for health and

welfare of INSURED EMPLOYEES (IE)

• 2.  Intervene for the rehabilitation and re-employment for disabled / injured

• 3.   To appoint inspectors for purposed of the act

• 4.  To determine the amount of contribution and relevant verification

Employer/ Employee’s Contribution

• It is the principle employer’s responsibility to deposit his own as well as employee’s contribution in respect of all employees including the contract Labour, into the E.S.I. Account.

• Non-availability of funds cannot be a ground for non-payment of contributions under the act. There is no provision to waive the contribution, damages and interest

Employer/ Employee’s Contribution

• The employer should get his factory or establishments registered with the E.S.I. Corporation within 15 days after the Act becoming applicable to it, and obtain the employer’s Code Number. The regional officer will allot a code number to the employer, which must be quoted in all documents and correspondence.

• RATE OF CONTRIBUTION OF THE WAGES

Employers’ @ Rs. 4.75 %

Employees’ @ Rs. 1.75 %

Benefits Available To Insured Employee

• The purpose of the Employee State Insurance Act is to provide benefits as detailed in the Act particularly in section 46, to the insured persons or their defendants.

• The following benefits are provided under section 46.

1. Sickness benefit

2. Maternity benefit

3. Disablement benefit

4. Dependents benefit

5. Medical benefit

6. Funeral expenses

Benefits

Sickness And Extended Sickness Benefit

• Represents periodical payments made to an insured person for the period of certified sickness after completing 9 months in insurable employment.

• To qualify, contributions should be for minimum 78 days in the relevant period.

• Maximum duration for benefit is 91 days.

• Rates of payment vary from rs.14-125 per day, i.e. Average of 50% of daily wages.

• Insured persons suffering from TB, leprosy, mental and malignant diseases or other specified long term diseases are entitled to extended benefits at higher rates, provided he has been continually employed for at least two years.

Disablement Benefit

• It is payable to an employee who is injured in the course of his employment and is permanently or temporarily disabled or contacts any occupational disease.

• A person who sustains temporary disablement for not less than 3days(excluding the day of accident) shall be entitled to periodical payment as may be prescribed by the central govt.

• The benefit of temporary disablement is, however, not payable for any day on which the employee works, remains on lease, holiday or strike in respect of which he receives wages.

Dependants’ Benefit

Periodical pension paid to dependants of deceased where death occurs out of employment injury or disease.

• Widows: 3/5th of benefit rate for life or until remarriage

• Children: 2/5th of benefit rate until 18

• Total amount distributed not to exceed ceiling of disablement benefit.

• Benefit not paid to married daughters.

• In case there is no widow or child, benefit can be paid to other dependants including parents.

• Amount paid is reviewed and increases granted from time to time to compensate for erosion in real value and cost of living.

Medical Benefit

• Insured persons and their families entitled to free, full and comprehensive medical care.

• Extended up to two years for chronic and long-term diseases.

• Treatment continues even if person goes out of coverage, till sickness ends.

• Package covers all aspects of health care from primary to super-specialist facilities, such as:

1) Out-patient treatment

2) Domiciliary treatment

3) Specialist consultation and diagnostic facilities

Maternity Benefit

• Implies cash payment to an insured woman in case of confinement or miscarriage or sickness arising out of pregnancy or premature birth.

• Woman should have contributed for minimum 70 days in the preceding two consecutive contribution periods.

• Daily rate of benefits double the standard sickness benefit rate, i.e. Full wages.

• Normally payable for max 12 weeks for confinement and 6 weeks for miscarriage or medical termination of pregnancy.

• Payable even in the event of the death of the woman.

Funeral Benefit

• Funeral expenses are in the nature of a lump sum payment upto a maximum of rs.2500 made to defray the expenditure of the funeral of deceased insured person.

• The amount is paid either to the eldest surviving member of the family or, in his absence, to the person who actually incurs the expenditure on the funeral.

ALL BENEFITS UNDER THE ESI SCHEME ARE PAID IN CASH EXCEPT MEDICAL BENEFIT, WHICH IS GIVEN IN KIND.

The ESIC Scheme

No.of implemented Centers :- 677

No.of Employers covered . :-2.38 lacs

No.of Insured persons :-85 lacs

No.of Beneficiaries :-330 lacs

No.of Regional offices/SRO’s :- 26

No.of ESI Hospitals / Annexes :- 1453

No.of Penal Clinics :-2950

Penalties

Different punishments have been prescribed for different types of offences in terms of Sec.85 (i) (six months imprisonment and fine

Rs. 5000/-), (ii) (one year imprisonment and fine),

and 85-A: (five years imprisonment and not less to 2 years) and 85-C (2) of the ESI Act, which are self explanatory.

Besides these provisions, action also can be taken under section 406 of the IPC in cases where an employer deducts contributions from the wages of his employees but does not pay the same to the corporation which amounts to criminal breach of trust.

Thank You

Presented by:Rahul MahidaSubject:-Labour Legislation and social Securities

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