The Employee’s State Insurance Act, 1948 (ESI Act

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Contents of the Act
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Introduction Objective Applicability Administration Registration Contribution Benefits under the Act Miscellaneous provisions

Introduction
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The Act was enacted based on the ILO convention of health insurance for industrial workers in 1927. Details of the scheme of health insurance for industrial workers was entrusted in march 1943 to Prof. B.P. Adarkar This finally emerged as workmen's state insurance Bill, 1946, which was changed to Employees State Insurance act on 19th April, 1948.

Objective

It aims at providing cash benefits in the case of employment injury, maternity benefits, And to give sickness & medical facilities in kind etc.

Applicability
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In factories , shops, educational Institutes, hotels, etc. where 10 or more workers are employed It is not applicable to State & Central Govt. Institutions, if benefits provided are already superior than those of E.S.I It is only applicable to those persons whose wages does not exceed Rs. 15000 per month Any one works for wages in connection with the work of Factory/Establishment comes under the definition of employee.

Administration of the Act
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There is formed a statutory body called Employee State Insurance Corporation for the administration of this act. Ministry of labour is chairman of the corporation It includes representative of Central Govt., State Govt., Employer, Employee, Medical profession, & parliament The CEO of the corporation is Director-General There is executive body for implementing the day-day operations of the corporation There is medical Benefit Council to advise on medical benefits There is formation of E.S.I fund for the purpose of giving cash benefits It is audited by Auditor General of India.

Registration under the Act

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There is compulsory registration for every new employee by filling the declaration form within 10 days of joining the establishment. A new establishment fills form 01 to be submitted to the local E.S.I office within 15 days of its start of operations A code no. is allotted to every organisation An employee cannot fill declaration form more than once On receiving the form , a smart I-card is allotted to every employee.

Contribution
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Employees earning Rs. 100 or less per day are exempted from making any contribution. 1.75% of employees wages by employee & 4.75% of total wages per month of all the employees in an establishment by employer. State Govt. contributes 1/8th of medical expenses The contribution has to be deposited by 21st of the following month. Contribution period is from 1st April to 30th September & from 1st October to 31st of March. Corresponding Benefit period is from 1st Jan. to 30th June & from 1st July to 31st Dec.

Contd…

When an employee joins the establishment for the first time, his contribution period starts from that date. The corresponding benefit period will start on the expiry of 9 months from the date of employment. Medical care for self & families are admissible from day one of entering into insurable employment.

Benefits
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Sickness & Extended sickness benefit Maternity benefit Disablement benefit Dependant’s benefit Funeral benefit Medical benefit Rehabilitation benefit Unemployment allowance

Sickness & Extended Sickness benefit
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Minimum 9 months of employment Benefit is 60% of wages Contribution period for atleast 78 days Maximum duration for availing sickness benefit is 91 days in two consecutive benefit periods Extended sickness (like T.B,etc.) benefit is for 124 days (2 years in case person is in employment for atleast 2 years) Benefit is 70% of wages.

Maternity Benefit

Cash payment of full wages for 12 weeks + 1 month in case of sickness. Contribution for minimum of 70 days in two consecutive contribution periods

Disablement Benefit


The disability should be last for more than 3 days excluding date of accident. It is not subject to any contributory condition Benefit is payable up to 75% of wages In case of permanent disability, benefit payable for whole life

Dependant’s benefits

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It is payable in cae of death of insured person Widow can get benefit at the rate of 3/5th of disablement benefit for whole life or till remarriage Each minor child 2/5th till the age of 21 years All the benefits should not exceed full rate of disablement benefits

Medical Benefits
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Medical treatment Insured person + family members Full, free & comprehensive medical coverage Free supply of drugs, ambulance, diet etc. There is a network of 1388 ESI Dispensaries, 148 ESI hospitals

Other Benefit

Rehabilitation-Each day admitted in artificial limb centre. Funeral Benefit -to eldest member of the family up to Rs. 5000 Unemployment allowance up to 50% of daily wages till 12 months, min. 3 years of service.

Miscellaneous Provisions

Penalty under the Act is imprisonment for 6 months/+ fine of Rs. 2000 The employer cannot dismiss employee during benefit period, or punish him in any way. The employer has to maintain:
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Attendance Register Register of Wages Accident Register Cash-book Inspection Book

Any dispute under the act is decided by Employee’s Insurance Court

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