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ESI Act

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 24^th 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.

Coverage

COVERAGE UNDER THE ESI ACT, 1948

Under 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.

Under Section 1(5) of the Act, 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, u/s 1(5) of the Act, the Scheme has been extended to Private Medical and Educational Institutions employing 20 or more persons in certain States .

The State Govt. has been requested to issue notification under Section 1(5) on the lines of Section 2(12) keeping the threshold limit for coverage as 10 employees instead of 20.

The existing wage-limit for coverage under the Act, is 15,000/- per month (with effect from 01.05.2010).

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

COVERAGE :

Contribution

E.S.I. Scheme being contributory in nature, all the employees in the factories or establishments to which the Act applies shall be insured in a manner provided by the Act. The contribution payable to  the Corporation in respect of 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 (w.e.f. 1.1.97) is 1.75% of the wages and that of employer’s is 4.75% of the wages paid/payable in respect of the employees in every wage period. Employees in receipt of a daily average wage upto 70/- 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 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

Benefits

The section 46 of the Act envisages following six social security benefits :-

(a) Medical Benefit

(b) Sickness Benefit(SB)

1.     Extended sickness Benefit(ESB)

2.     Enhanced Sickness Benefit

(c) Maternity Benefit(MB)

(d) Disablement Benefit

1.     Temporary disablement benefit(TDB)

2.     Permanent disablement benefit(PDB)

(e) Dependants’ Benefit(DB)

(f) Funeral Expenses

An amount of5000/- is payable to the dependents or to the person who performs last rites.

(g) Rajiv Gandhi Shramik Kalyan Yojana - This scheme of Unemployment allowance was introduced w.e.f. 01-04-2005.  An Insured Person who become unemployed after being insured three or more years, due to closure of factory/establishment, retrenchment or permanent invalidity are entitled to :-

• Unemployment Allowance equal to 50% of wage for a maximum period of upto one year.
• Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives unemployment allowance.
• Vocational Training provided for upgrading skills - Expenditure on fee/travelling allowance borne by ESIC.

An interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fixed percentage of the workers wages, whereas, they are provided social security benefits according to individual needs without distinction.

Cash Benefits are disbursed by the Corporation through its Local Offices LOs/ Mini Local Offices (MLOs)/Sub Local Offices SLOs)/pay offices, subject to certain contributory conditions.

In addition, the scheme also provides some other need based benefits to insured workers.

These includes :

                                i.            Rehabilitation allowance

                             ii.            Vocational Rehabilitation

 Hope This Info. Is Useful