ACt and Provision

1. The Employees State Insurance Act &
Scheme ,1948
Presented by:
Rahul Mahida
Subject:-Labour Legislation and
social Securities

2. 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.

3. 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.

4. Applicability of the Act:
•All factories
•Shops employing 20 or more persons.
•Such other Govt. specified
establishments.

5. 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.

6. 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

7. 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
STATES
All the States except Nagaland, Manipur, Tripura,
Sikkim, Arunachal Pradesh and Mizoram.
UNION TERRITORIES
Delhi, Chandigarh and Pondicherry

8. 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.

9. 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

10. 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

11. 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 %

12. 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

13. Benefits


14. 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.

15. 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.

16. 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.

17. 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

18. 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.

19. 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.

20. 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

22. 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.

23. Thank You
Presented by:
Rahul Mahida
Subject:-Labour Legislation and social
Securities
“Be the change ,spread smile ,spread Happiness & love”