Employees State Insurance Act,1948

Brief outline.

Employees State Insurance Act,1948. This central Act got implemented in

various phases , area wise, across India.

This is a massive social welfare legislation for our organized workforce , as enshrined in the Constitution of India.

This legislation got amended from time to time in order to extend the benefits for the working population.

Coverage of the Act Sec 2(12) ----- where 10 or more persons are

employed , whether power is used or not . This was amended only in 24.5.10. Previously the limit of coverage was 20 or more persons .

Gradually extended to other sectors like hotels, restaurants, shops, establishment, cinemas, news papers, , road motor transport etc.

Wages limit at present stands at Rs 15000/- max per month. ( from 1.5.2010.)

Since inception of the statute, it got increased from time to time . Initial coverage was Rs 500/- per month.

Implemented Areas & not implemented areas. As on March, 13, total coverage of persons

including family members are 15 crore .

Who are covered under this act ? Employees / Sec 2(9) of the Act Who are employees? Directly employed indirectly employed , on the premises

or outside under the direct control of employer.

Part time employee/ on contract employees.

Whose services are temporarily lent on.

5 Distribution or sale of products.

Distinction between contract of service & contract for service. Criterion-- Relationship between

master & servant exists or not? Some examples where relationship

does not exist. Apprentices electricity repair in plant trainees construction workers at

construction site. TV repairs / plumbing jobs.

How to go about the coverage ? Registration of the factories. (Now on line registration is

available.) Code No to be allotted by ESIC to the respective

employer. Individual declaration of the employees to obtain, before

engaging I Card to be issued by ESI to individual employees ( Tem

& permanent) Contribution to be deposited by 21st of the next month. Employees contribution is 1.75% of the wages Employer’s contribution is 4.75% Total 6.5% Employees who are getting Rs 70/ daily Av wages, no

deduction to be made from them but employer’s share of 4.75% to pay.

Several Forms / RCC etc to submit monthly, half yearly & annually.

Contribution Period-------Benefit period 1.4 to 30.9------ 1.1 to 30.6

1.10 to 31.3----- 1.7 to 31.12

NB : If some one joins in between?

Example --- if some one joins say on 5th jan, contribution to be deducted till 31.3, his benefit period will start from 5th oct to 31.12.

Some guidelines :- to deduct ESI from the very first day of the

employment His/her benefit period will commence after 9

months only. This is only for sickness benefit . Not for accident

benefits. Daily standard sickness benefit raised from 150/

per day to Rs 190 / per day Max Presently there are 32 slabs RCC to submit after 6 months . On line

submissions can be made now a days. Where 40 or more employees are employed, it

has to be certified by CA

Benefits under the scheme … Sickness Cash payments Abstention to work thru valid ESI papers

issued by ESI Panel Doctors. Max benefits is for 91 days in a 2

consecutive benefit periods 2 days waiting period is deducted Rate is approx 50% of the individual’s

wages. Min 90 days to be present in a

contribution period

Extended sickness For prolonged diseases Higher cash benefits 70% of av daily wages Extended for 2 years

Enhanced sickness benefits… For family Planning Double the rate of sickness benefit Maternity benefit/ miscarriage 12 weeks ( before & after delivery) Cash payments to an insured woman Paid contribution at least 80 days in

2 consecutive contribution period. Confinement expenses Rs 2500/ each

Temp & Permanent Disablement benefit( cash) For employment injury/

occupational disease One day’s present is enough 70% of the daily wages No contribution is required Proportion to the losses of the

injury Fatal cases also

Dependent Benefit Periodical payment for family members in

case of death for injury/ occupational disease.

No contribution criterion/ widow will get the benefit for life on monthly basis

Son/daughter will get the benefit till 18 yrs

Funeral benefit Lump sum payment of Rs 5000/- the

family member At a time payment

Medical benefit for retired/ disabled person eligible for medical benefit for

self, spouse, dependent, on retirement

Min 5 yrs insurable employment before retirement.

Rs 120 payment in advance in a year

Employees Compensation Act, 1923 & it’s relevance ?

Some important information… Several Forms & records to maintain by the

employer Bar to reduce wages / Sec 72 Bar to dismiss employees during her/ his sickness

( sec 73) Exemption of ESI Act Authorized leave to ESI benefit in concurrence /

employer can deduct Recovery officer ( sec 45(1) (b) Damages & interest can be imposed Arrest of employer Attachment of properties of the employer ESI court ( sec 75)

What is ‘ Wages” ? All remuneration , if the terms of

contract express or implied Period of authorized leave , lock

out/ strike which is not illegal Any Back wages Additional expenses , if any, paid

at the interval not exceeding 2 months ( defray expenses)

Not to be treated as ‘ Wages” PF/ pension contribution Daily allowances on tour Gratuity payment Retrenchment compensation in lieu of notice period Benefits under ESI act Encashment of leave Inam Washing allowance for livery uniform for servant Commissions to dealers/ agents Transport operators/ Rickshaw pullers ( amount paid)

OT wages not to be taken into account for coverage but contribution to be paid to ESI authority

Important point to remember. Where the employer does not give break up figure with regard to

purchase of materials / machines , 25% straightway to be taken by ESI authority as wages & contribution to that has to be paid.

Other side of ESI Services Unfriendly panel Doc Do not give proper treatment Cumbersome procedure Medicines not available in most of the

times Docs are absent Equipment in the hospital are not

generally up to date Worst sufferers are ‘ occupational disease”

holders Poor quality of food stuff in the hospitals Finally Corruption to a large extent

Some Important Forms/ Registers to maintain by Employer. F/01 – registration for employer’s code 1A / annual information of the orgn F/1 Declaration form, F/6 – register of

employees, F11– accident book to maintain, F12/ accident report to send, RCC to send within 42 days from end of each contribution period, etc etc

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