INTRODUCTION
• ESI Act (Employees State Insurance) passed in 1948 (amended in 1975, 1984, 1989, 2010).
• ESI Act is a multidimensional social security system tailored to provide socio-economic protection (cash & Medical treatment benefits) to worker population and their dependents.
• In contingencies, such as Sickness, Maternity and Death or Disablement or Occupational diseases.
OBJECTIVE
• To promote and measure for health and welfare of Insured Employees
• Intervene for the rehabilitation and re-employment for disabled / injured
• To appoint inspectors for the purpose of the act
• To determine the amount of contribution and relevant verification.
DEFINITIONS
Employee U/S 2(9):
Any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment
Immediate Employer U/S 2(13):
In relation to employees employed by or through him, means a person who has undertaken the execution on the premises of a factory or an establishment to which this Act applies or under the supervision of the principal employer or his agent.
Principal Employer U/S 2(17):
(i) in a factory, the owner or occupier of the factory and includes the managing agent of such owner or occupier, the legal representative of a deceased owner or occupier, and where a person has been named as the manager of the factory under 3 [the Factories Act, 1948] (63 of 1948), the person so named ;
(ii) in any establishment under the control of any department of any Government in India, the authority appointed by such Government in this behalf or where no authority is so appointed, the head of the department ;
(iii) in any other establishment, any person responsible for the supervision and control of the establishment ;
Wages U/S 22:
Means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave, lock-out, strike which is not illegal or layoff and other additional remuneration.
But does not include:
(a) any contribution paid by the employer to any pension fund or provident fund
(b) any travelling allowance or the value of any travelling concession;
(c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment
(d) any gratuity payable on discharge ;
APPLICABILITY OF ESI ACT
Section 2 (12)
The Act is applicable to the factories employing 10 or more persons irrespective of whether power is used in the process of manufacturing or not.
Section 1(5)
The Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons.
Further scheme has been extended to Private Medical Institution and Educational Institutions employing 20 or more persons in certain states.
The existing wage-limit for coverage under the Act, is Rs.21,000/- per month (with effect from 1.01.2017).
NON APPLICABILITY OF THE ACT
- 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 above mentioned 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 Official Gazette.
- The Act, however, does not apply to mine, railway running shed, Government factories or establishments, Indian Military services and other Government notified exempted establishments.
ESI CONTRIBUTION
• The contribution payable to the Corporation in respect o an employee shall comprise of employer's contribution and employee's contribution at a specified rate
• The rates are revised from time to time. Currently, the employee's contribution rate is 0.75% of the wages and that of employer's is 3.25% of the wages paid/payable in respect of the employees in every wage period
• Employees in receipt of a daily average wage upto Rs.137/- are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.
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 15 days of the last day of the Calendar month in which the contributions fall due
Contribution Period and Benefit Period
Contribution Period | Cash Benefit Period |
1st April to 30th Sept. | 1st Jan of the following year to 30th June |
1st Oct to 31st March of the year following. | 1st July to 31st December. |
ESI BENFITS
The section 46 of the Act envisages following six social security benefits :
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/- .
• Outpatient treatment
• Domiciliary treatment by visits at their residences.
• Specialists Consultation.
• In-patient treatment (Hospitalisation)
• Free supply of drugs dressings and artificial limbs, aids and appliances.
• imaging and laboratory services.
• Integrated family welfare, immunisation and MCH Programme and other national health programme etc.
• Ambulance service or re-imbursement of conveyance charges for going to hospitals, diagnostic centres etc.
• Medical Certification and Special provisions
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.
1. EXTENDED SICKNESS BENEFIT : Sickness Benefit extendable upto two years in the case of 34 malignant and long-term diseases at an enhanced rate of 80 per cent of wages. Diseases like Turberculosis, Leprosy, AIDS, Chest Diseases
2. ENHANCED SICKNESS BENEFIT: Sickness Benefit equal to full wage is payable to insured persons undergoing sterilization for 7 days/14 days for male and female workers respectively.
MATERNITY BENEFIT
· Maternity Benefit is payable to an Insured Woman in the following cases subject to contributory conditions:
· Confinement-payable for a period of 12 weeks (84 days)
· Miscarriage or Medical Termination of Pregnancy (MTP)-payable for 26 weeks (182 days) from the date of miscarriage
· Sickness arising out of Pregnancy, Confinement, Premature birth-payable for a period not exceeding one month
· In the event of the death of the Insured Woman during confinement leaving behind a child, Maternity Benefit is payable to her nominee. Maternity benefit rate is 100% of average daily wages.
DISABLEMENT BENEFIT
1. TEMPORARY DISABLEMENT BENEFIT (TDB):
From day one of entering insurable employment & irrespective of having paid any contribution in case of employment injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long as disability continues.
2. PERMANENT DISABLEMENT BENEFIT (PDB):
The benefit is paid at the rate of 90% of wage in the form of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical Board
DEPENDANTS BENEFITS
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.
OTHER BENEFITS:
Funeral Expenses : An amount of Rs.15,000/- 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.
SUMMARISE
• This act provides Social Security scheme for employees drawing wages not exceeding ₹21000/-.
• This scheme framed under the act aims at providing for certain cash benefits to employees in the event of sickness, maternity, employment injury and medical facilities in kind.
• This act also has provisions to identify the employees who are entitled to get benefits.
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