1. Employees' State Insurance Act, 1948 1. ESI protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, death due to employment injury resulting in loss of wages or earning capacity. 2. The Act also guarantees reasonably good medical care to workers and their immediate dependants. 2. Today we will cover following topics- What is ESI Act ? APPLICABILITY AREAS COVERED Contribution Collection of Contribution ESI Benefits FAQ 3. What is ESI ? The promulgation of Employees' State Insurance Act, 1948 envisaged an integrated need based social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, death due to employment injury resulting in loss of wages or earning capacity. The Act also guarantees reasonably good medical care to workers and their immediate dependants. Following the promulgation of the ESI Act the Central Govt. set up the ESI Corporation to administer the Scheme. The Scheme, thereafter was first implemented at Kanpur and Delhi on 24th February 1952. The Act further absolved the employers of their obligations under the Maternity Benefit Act, 1961 and Workmen's Compensation Act 1923. The benefit provided to the employees under the Act are also in conformity with ILO conventions. 4. APPLICABILITY - Under Section 2(12) the Act is applicable to non-seasonal factories employing 10 or more persons. Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatres, road-motor transport undertakings and newspaper establishments employing 20* or more persons. Further under section 1(5) of the Act, the Scheme has been extended to Private Medical and Educational institutions employing 20* or more persons in certain States/UTs. *Note: 14 State Govts. / UTs have reduced the threshold limit for coverage of shops and other establishments from 20 to 10 or more persons. Remaining State Governments/UTs are in the process of reducing the same. The existing wage limit for coverage under the Act is Rs. 15,000/- per month ( w.e.f. 01/05/2010). This limit is under review and can extend limit up to 25,000/- per month. 5. 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 of Indian Union. STATES - All the States except Manipur, Sikkim, Arunachal Pradesh and Mizoram. UNION TERRITORIES - Delhi and Chandigarh 6. Contribution - ESI Scheme, like most of the Social Security Schemes the world over, is a self financing health insurance scheme. Contributions are raised from covered employees and their employers as a fixed percentage of wages. As of now, covered employees contribute 1.75% of the wages, whereas, the employers contribute 4.75% of the wages, payable to their employees. Employees earning up to Rs.100/- a day are exempted from payment of their share of contribution. The State Governments, as per provisions of the Act, contribute 1/8th of the expenditure of medical benefit within a per capita ceiling of Rs. 1500/- per Insured Person per annum. Any additional expenditure incurred by the State Governments, over and above the ceiling and not falling within the shareable pool, is borne by the State Governments concerned. 7. Collection of Contribution An employer is liable to pay his contribution in respect of every employee and deduct employees contribution from wages bill and shall pay these contributions at the above specified rates to the Corporation within 21 days of the last day of the Calendar month in which the contributions fall due. The Corporation has authorized designated branches of the State Bank of India and some other banks to receive the payments on its behalf. 8. Contribution Period and Benefit Period There are two contribution periods each of six months duration and two corresponding benefit periods also of six months duration as under. 9. Benefits- The section 46 of the Act envisages following six social security benefits :- Medical Benefit Sickness Benefit(SB) Maternity Benefit (MB) Disablement Benefit Dependants' Benefit(DB) Funeral Expenses Vocational Rehabilitation :To permanently disabled Insured Person for undergoing VR Training at VRS. Physical Rehabilitation : In case of physical disablement due to employment injury. Old Age Medical Care :For Insured Person retiring on attaining the age of superannuation or under VRS/ERS and person having to leave service due to permanent disability insured person & spouse on payment of Rs. 120/- per annum. Rajiv Gandhi Shramik Kalyan Yojana Incentive to employers in the Private Sector for providing regular employment to the persons with disability : Minimum wage limit for Physically Disabled Persons for availing ESIC Benefits is 25,000/-. Employers contribution is paid by the Central Government for 3 years. 10. Medical Benefit - Full medical care is provided to an Insured person and his family members from the day he enters insurable employment. There is no ceiling on expenditure on the treatment of an Insured Person or his family member. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs.120/- . Maternity Benefit (MB)- Maternity Benefit for confinement/pregnancy is payable for three months, which is extendable by further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding year. Dependants' Benefit(DB) DB paid at the rate of 90% of wage in the form of monthly payment to the dependants of a deceased Insured person in cases where death occurs due to employment injury or occupational hazards 11. Sickness Benefit - Sickness Benefit in the form of cash compensation at the rate of 70 per cent of wages is payable to insured workers during the periods of certified sickness for a maximum of 91 days in a year. In order to qualify for sickness benefit the insured worker is required to contribute for 78 days in a contribution period of 6 months. Extended Sickness Benefit(ESB) - SB extendable unto two years in the case of 34 malignant and long-term diseases at an enhanced rate of 80 per cent of wages. Enhanced Sickness Benefit - Enhanced Sickness Benefit equal to full wage is payable to insured persons undergoing sterilization for 7 days/14 days for male and female workers respectively. Funeral Expenses : An amount of Rs.10,000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment. Confinement Expenses : An Insured Women or an I.P.in respect of his wife in case confinement occurs at a place where necessary medical facilities under ESI Scheme are not available. 12. DON'TS for Employees - Do not lend your Identity Card to any one else Do not put unnecessary demands upon your doctor. Let him help others waiting for their turn. Do not tamper with your medical certificate. This is punishable act. Do not delay in depositing your medical certificate with the local office. Do not make false statements or false representation to obtain benefits which are not legally due to you. Local Office Manager is your guide. Take his advice in case of any problem for cash/any claim benefits 13. Benefits Summary - 14. FAQ- What is ESI Scheme ? It is a comphrensive Social Security Scheme designed to accomplish the task of socially protecting the employees in the organized sector against the events of sickness, maternity, disablement and death due to employment injury and to provide medial care to the insured employees and their families. Who administers the ESI Scheme ? The ESI Scheme is administered by a corporate body called the Employees State Insurnace Corporation (ESIC). How the Scheme is funded ? The ESI scheme is a self financing scheme. The ESI funds are primarily build out of contribution from employers and employees payable monthly at a fixed percentage of wages paid. 15. Is it mandatory for the Employer to register under the scheme ? Yes, It is the statutory responsibility of the employer under section 2 A of the Act to register their Factory/Establishment under the ESI Act within 15 days from the date of its applicability to them. What is the process for registration of an employer ? Employer has to submit a Form-01 to the concerned Regional Office and obtain an identification number called the Code number ( Section 2(A) read with regulation 10- B). Who are the persons not to be counted for coverage of a factory ? Following persons are not to be counted 1. A Proprietor or a partner whether drawing salary or not; 2. A contractor lending the series of his employee; 3. An apprentice engaged for the first time; 4. Persons employed on contract for services e.g. legal technical, consultant; 5. Person employed in branch/sales offices etc away from the factory premises are not to be counted for the purpose of covered as employee under section 2(9), if their wages does not exceed the ceiling limit prescribed. 16. How wages are computed for payment of contribution ? The following items are taken into account for computation of wages for payment of contribution 1) Basic Pay, Wages, Salary ; 2) DA/HRA/CCA/Overtime/Officiating allowance/night shift allowance/education allowance/food & tea allowance/conveyance allowance; 3) Wages/salary/pay for weekly off and public holidays 4) Commission paid to sales staff; 5) Subsistence allowance paid to an employee during the period of suspension; 6) Attendance bonus or incentive or exgratia in lieu of Attendance Bonus or production incentive; 7) Regular Honorarium or salary or remuneration paid to a Director; 17. Thanks for Watching Prepared By AK Follow us - https://www.facebook.com/groups/IndianHR/ https://www.facebook.com/IndianHR Source - http://www.esic.nic.in/ Last Updated 30 April 2014