You are on page 1of 46

EMPLOYEE STATE INSURANCE ACT, 1948 and MINIMUM WAGES ACT 1948&

PURPOSE OF THE ACT


It is a welfare legislationto provide labour welfare to help workers in their difficult times.

OBJECTIVE
The object of the Act is to secure sickness, maternity, disablement and medical benefits to employees of factories and establishments and dependents benefits to the dependents of such employees.

APPLICABILITY
1. To all Factories & establishments employing 20 or more employees.

2. Every employee drawing wages up to Rs. 10,000/- per month.

Time & Method for payment of Contribution


Both the employers and the Employees contribution are to paid in cash or by cheque , into the State Bank of India or any other bank authorized by the ESI Corporation, by filling in a prescribed Challan in quadruplicate within 21 days following the end of the calendar month in which the contribution falls due.

The Bank will retain two copies of the Challan and return other two to the employer, one for submitting to the Regional Office of the Corporation and the other for the record of the employer.

Procedure for Registration


1) Declaration of Registration to the Regional Office within 15 days in the prescribed form.

2) Upon receipt of the Declaration of Registration the Regional Office shall allot to it a Code Number

3) Establishment shall stand registered under the Act.

Benefits under the Act


Six kinds of benefits are provided under the Act:
y y y y y y

Sickness benefit Maternity benefit Disablement benefit Dependents benefit Medical benefit and Funeral expenses.

Benefits cannot be combined


An employee is not entitled to receive two benefits at the same time. That means he cannot receive for the same period.
a) b)

Both sickness benefit and maternity benefit; or

Both sickness benefit and disablement benefit for temporary disablement; or Both maternity benefit and disablement benefit for temporary disablement.
c)

ESI FUND

It is created by contributions from employee and employer. Employer contributes 4.75% and employee contributes 1.75% of wages/salary. This fund is deposited by approved banks/RBI .

FORMS
FORM No. FORM-01 SUBJECT Employer's Registration Form FORM-01(A Form of annual information on factory/establishment covered under ESI Act FORM-1 FORM-1(A) FORM-2 FORM-3 FORM-5 FORM-5(A) FORM-5 (New) FORM-6 FORM-9 Declaration Form Family Declaration Form Addition/Deletion in Family Declaration Form Return of Declaration Form Return of Contribution Advance payment of contribution Return of Contribution (New) Register of Employees Claim for Sickness/ Temporary Disablement Benefit/Maternity Benefit

FORM-11 FORM-12 FORM-14 FORM-15 FORM-16 FORM-19 FORM-20 FORM-22 FORM-23 FORM-24 ESIC-32 ESIC-37 ESIC-53

Accident Book Accident Report from Employer Claim for Permanent Disablement Benefit Claim for Dependent Benefit Claim for periodical payment of Dependent Benefits Claim for Maternity Benefit and notice of work Claim for Maternity Benefit after the death of an Insured Women leaving behind the child Funeral Expenses Claim Life Certificate for Permanent Disablement Benefit Declaration and Certificate for Dependents Benefit Wage/Contributory record for disablement benefit Certificate of re-employment/continuous employment Application for change in particulars of Insured Persons regarding change of Branch Office/Dispensary Declaration form regarding payment to the legal

ESIC-63

ESIC-71 ESIC-72 ESIC-86 ESIC-105 ESIC-126 ESIC-142

Particulars of contribution in case Return of Contribution in respect of an IP not sent Application for duplicate Identity Card Certificate of Employment Certificate of Entitlement Certificate of continuous employment for Extended Medical and Sickness Benefit Claim for conveyance allowance and/or compensation for loss of wages for an IP appeared before the medical board Proforma for Survey Register Proformas

C-1,2 & 6 C-18, Actual, Interest, C-19, 20, 22 & 23, D-18 & D-19 C-2 to C-5 & C-7 to C-12

Proformas

Offences
If any person (a) Fails to pay any contribution payable by him under the Act; or (b) Deducts from the wages of an employee the employer's contributions ; or (c) Fails to submit any return required by the regulations, or makes a false return. He would be punished with imprisonment up to 1 year or with fine up to Rs. 4000/- or with both

Revision w.e.f. 01.12.2007


1.

Daily rates of disability benefits have been increased to 50 per cent form 40 per cent. Daily rates of dependents benefit have been increased to 50 per cent from 40 per cent. Funeral expenses given under rule 59 has been increased to Rs. 3,000/- from Rs. 2,500/-

2.

3.

1948

Passed in 1948 to secure the welfare of the unorganized workers in certain industries by fixing the minimum rates of wages. In early days of industrial revolution, workers were exploited with exorbitant delays in payment of wages , arbitrary deductions and other unfair practices on the part of employers. Delay in the payment of wages, heavy fines for small omission and commission. Were quite common. Irregularities committed by employers were brought into the notice of ROYAL COMMISSION OF LABOUR IN INDIA.

DEFINITION

WAGES Expressed or Implied Monetary Payment in terms of Contract of Employment and includes House Rent Allowance.

WAGES DO NOT INCLUDE House Accommodation, Supply of necessities like Light, Water and Provision of Medical Attendance and Other Amenity or Service specifically excluded by the Appropriate Government. Contribution made to Pension Fund or Provident Fund or under any scheme of Social Insurance Travelling Allowance or the value of any Travelling Concession Special Allowances provided based on the nature of Employment Gratuity Payable

APPLICABILITY OF THE ACT

Applicable to Whole India Central Government Act of 1948 and Rules made there under will be applicable and the directions given in the Act should be followed.

LIST OF SCHEDULED EMPLOYMENTS IN CENTRAL GOVERNMENT UNDER THE MINIMUM WAGES ACT, 1948
S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Agriculture Construction/Maintenance of Roads and Building Operations. Maintenance of Buildings Construction and Maintenance of Runways. Gypsum mines. Barites mines. Bauxite mines. Manganese mines. China Clay mines. Kyanite mines. Copper mines. Clay mines. NAME OF THE EMPLOYMENT

13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.

Stone mines. White Clay mines. Orchire mines. Fire Clay mines. Steatite (Soapstone and Talc) Mines. Asbestos mines. Chromite mines. Quartzite Mines Quartz minesSilica mines. Magnesite Mines Graphite mines. Felspar mines. Red oxide mines. Laterite mines. Dolomite mines. Iron Ore mines.

29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40.

Granite mines. Wolfram mines. Magnetite mines. Rock phosphate mines. Hematite mines. Marble and Calcite Mines. Uranium mines Mica mines. Employment in Lignite Mines Employment in Gravel Mines Employment in the Slate Mines Employment in laying down of underground electric, wireless, radio, television, telephone, telegraph and overseas communication cables and similar other underground cabling, electric lines water supply lines and sewerage pipe lines.

41. 42. 43. 44.

Loading and Unloading in Railways Goods Shed Stone Breaking and Stone Crushing Employment in Sweeping and Cleaning Employment in Watch and Ward

Objective

To provide minimum wages to the workers working in organized sector.

To stop exploitation of the workers.

To empower the government to take steps for fixing minimum wages and to revise this wages every 2 years

Scope of the Act

This Act is applicable to all employments described in the Act i.e. minimum wages have to be paid to all the employees of the employments described in the Act

Fixing Minimum Ratessec(3)


Appropriate government shall fix minimum rates of wages for all employments specified in the schedule of the act.

Review of minimum wages The appropriate government shall review the minimum wages at such intervals as it may deem fit. However, such a review shall be done before Five Years from date of fixing minimum wages.

Wage period-3(3)
The Minimum wages may be fixed for different wage periods like By the Hour, By the Day, By the month, or By other larger wage period.

Different Minimum Wages may be fixed by the Government for:


Different employments (specified in the schedule) Different classes (e.g. skilled, unskilled, semis skilled, etc.) of work in the same employments Adults, adolescents, children and apprentices Different localities.

Fixing Minimum Rates of Wages-Sec (5)


Publish its proposals in the official gazette asking comments from the affected parties, Constitute committees/sub committees for the purpose. The committees/sub-committees and advisory boards constituted by the Government consist of equal number of members of :  Employers,  Employees, and  Independent persons

Wages in Cash

The wages have to be paid in Cash only. However, permission can be taken from the government where payment of wages in kind when the same in as per custom or concessional supply of materials is made to the employees.

NORMAL WORKING HOURS

For an Adult Worker, Working in Factories the number of Working Hours should not exceed 48 Hours in a week.

One Day should be given as a holiday as Weekly Holiday. The Day can be any day but it should be adhered for every week. The same should be displayed in the notice board of the Factory.

The Daily Hours should not exceed more than 9 Hours with 1 Hour Rest Interval.

Where a person has worked on a Holiday either a Compensatory Holiday may be provided or An Overtime Wages will be paid.

Wages for overtime (sec14)

Where a person has worked more than the Normal Working Hours for any day, the excess hours worked will be treated as Overtime Where the Fixed Normal Working Hours for any day is in excess of 8 Hours we have to go by the method of weekly worked hours. If the person has worked for more than 48 hours in a week then, the excess hours worked will be treated as Overtime.

Wages for less than the normal working day(sec15)

Where an Employee worked on any day less than the Normal Working Hours due to the fact that, Employer could not provide the activities of the job then, the Employee is entitled to receive full salary.

Where an Employee worked on any day less than the Normal Working Hours due to the fact that, Employee has not worked due to his unwillingness then, the employee is not entitled to receive full salary.

Minimum time rate wages for piece work (sec17)

Employer shall pay to such an employee wages at not less than the minimum time rate .

Maintenance of registers & records (sec18)

Registers shall give particulars of employees. Work performed by them . Overtime work Gross wages ,deductions made etc

PROCEDURE FOR CLAIMS

An Employee who has claim over the Employer through his legal practitioner or a official of a registered Trade Union or Employee himself may apply to the Authority for claims for getting a direction. The Appropriate Authority will hear the applicant and the Employer and after giving both the persons a reasonable opportunity to hear and after making such further inquiry will pass an order. In case the Appropriate Authority finds that the Employer is guilty then, the Appropriate Authority will direct the Employer for Payment of Compensation which may not exceed 10 times of the actual Compensation. In case the Appropriate Authority finds that the Employee is guilty then, no Compensation is payable.

ENFORCEMENT
The enforcement of the Minimum Wages Act, 1948 is secured at two levels. While in the Central Sphere, the enforcement is secured through the Inspecting officers of the Chief Labour Commissioner (Central) commonly designated as Industrial Relations Machinery (CIRM), the compliance in the State Sphere is ensured through the State Enforcement Machinery. They

Penalties (sec22)
Offence
Contravention of Minimum Wages Act by employer

Punishment
Fine which may extend up to Rs 500/-

Payment of less than Imprisonment which may Minimum Wages to employee extend up to 6 Months or Fine which may extend up to Rs 500/- or Both

ARTICLE

India: Minimum Wage Act to cover all


The Indian labour ministry has proposed inclusion of all jobs in the Minimum Wages act with an aim to benefit all 34 crore workers in the unorganized sector. In a fresh attempt to ensure minimum wage for all 34 crore workers in the unorganised sector, the labour ministry has proposed changes in the Minimum Wage Act to allow each job-besides those listed by the Centre and the states-to be covered by the Act.

The amendment, to be introduced in the forthcoming Budget Session, proposes that every worker be paid the higher of the twolowest wage fixed for an unskilled worker or the National Floor Level Minimum Wage-for any employment other than that covered in the Schedule. At present, the Centre and states are empowered to notify any job in the Schedule only when the number of employees is 1,000 or more. There are 45 jobs identified in the Centres agricultural and non-agricultural lists while states have as high as 1,596. At present, the Centre and states are empowered to notify any job in the Schedule only when the number of employees is 1,000 or more. There are 45 jobs identified in the Centres agricultural and non-agricultural lists while states have as high as 1,596.

In September 2007, the UPA government dropped a proposal for a national minimum wage for all jobs and retained only social security provisions while introducing the Unorganized Sector Workers Social Security Bill. On an average, unorganized sector workers do not earn more than Rs 50 per day while the national floor of minimum wage, last revised in November, is Rs 100. There are over 34 crores workers in this sector of which around 22 crores are in the agricultural sector. These include home-based workers, employees in household enterprises or small units, agricultural workers, labor on construction sites, domestic work, and other forms of casual or temporary employees, including teachers. While pushing for a minimum wage, the ministry has proposed uniform wage for adult, adolescent, children and apprentices as a differential wage rate provide a cover to the employer to shortchange temporary workers.

The wages would have to be revised every two years if a state does not provide a dearness allowance that is reviewed every six months. States which give special allowances fully linked to the consumer price index would have the freedom to fix the floor wage every five years. The proposed changes would levy heavy penalty on cheating employers. The fine is proposed to be raised to Rs 5,000 from current Rs 500 with the possibility of a six-month jail. For the second offence, fine would be up to Rs 10,000 or one year imprisonment or both. Those who violate the provisions of the Act - that is do not maintain employment register, do not provide employment card or salary slips- would be fined Rs 5,000 for the first offence and up to Rs 10,000 for subsequent contraventions. - By, Amitav Ranjan SOURCE : Indian Express - 20 January 2010

THANK YOU.