AN OVERVIEW OF THE

ESI ACT

BY
SHASHANK SINGH
 What is ESI Act ?
It is the First Social Security Legislation In
Independent India.
Was passed by the Parliament in 1948
Came into effect in the year 1952, 24th February at
Kanpur.
It is an Act to provide certain benefits to Employees in
case of
Sickness
Maternity
Employment Injury
Certain other matters.
 Coverage
It is a process by which the Act is brought into effect at
a determined place.
A Notification is issued by the Central Government
under Section 1(3) of the Act, with a specific date for
implementation.
From the date of Notification all coverable
Factory/Establishment should register themselves
under the Act and obtain code No and do Compliance.
 Applicability for Coverage
1. Factory:
Having 10 or more persons working and manufacturing
activity is being carried out. Coverage done as per Sec 2(12)
of Act.
2. Establishment:
Having 20 or more employees working and coverage done as
per Sec 1 (5) of the Act. Examples (shops, contractors etc)

As per Sec 1(6) of the Act, once a factory/establishment is

covered, it will remain covered even if the employee
strength falls below the required limit.
 Basic Concepts
 1. Wage Limit for Coverage:
Upto Dec-2016 : Rs 15000/- pm
From 01-01-2017 : Rs. 21000/-pm

 2. Rate of Contribution:
Employee Share : 1.75 %
Employer Share : 4.75 %
Total Payable 6.5 %
In newly Implemented areas for the Initial 2 years rate of
contribution will be :
Employee Share : 1%
Employer Share : 3%
Total Payable 4%
 Basic Concepts
 3. Contribution Period and Benefits Period:-
 (Regulation 4 of ESI (Gen) Regulation 1950)

CONTRIBUTION PERIOD BENEFIT PERIOD

APRIL – to- SEPTEMBER JANUARY-to-JUNE

OCTOBER-to MARCH JULY-to DECEMBER

 Sickness Benefits can be availed after expiry of 9

months from the date of insurable employment
 Registration
Employer:
Under Regulation 10-B, Employer to whom this Act applies
should complete registration within 15 days from the
applicability.
Employees:
Under Regulation 12 and 14, Employer to ensure all
Employees are registered immediately and not later than 10
days.
 (Details of family, Nominee, Bank Details, Adhar No to be taken)

Registration to be done Online at www.esic.in

No Documentation needed.
 BENEFITS
Medical Benefits
Sickness Benefits
Disablement Benefits
Dependents Benefits
Maternity Benefits
 Unemployment Allowance (RGSKY)
 Confinement Expenses
 Funeral Expenses
 Vocational Training
 Rehabilitation Expenses
 Artificial limbs
BENEFITS-Important Definitions
Employee: (Section 2(9) )
 Person employed for wages upto Rs 21000/- pm
 Directly by the Company or Through Contractor.
 Part time, Daily wages, Piece rated,
 Working in all the departments(Factory, Admin, Sales etc)

Insured Person : (Section 2(14) )

 Any person who was or is an Employee
 For whom any contribution were paid or payable
 Who is entitled to any of the benefits under the Act.
BENEFITS-Important Definitions
Family: Section 2(11)
 Spouse
 Minor legitimate/Adopted child
 Dependant child upto age of 21 years if studying/ unmarried
daughters
 Infirm Child dependant on the IP irrespective of age.
 Dependant Parents whose income is less than the limit prescribed.
 For Unmarried IP, if his/her parents not alive, then dependant
minor brothers and sisters.
The family particulars as per above will be entered in
the ID particulars of the IP and they will be eligible for
medical facilities.
BENEFITS-Important Definitions
Dependants: Section 2(6-A)
 Widow,
 Son upto age of 25 years
 Daughters till marriage
 Widowed Mothers
 Infirm Son/Daughters dependent on the Income of IP even if age
More than 25 years
The dependents are eligible for Dependents benefits in
case of death of IP due to employment injury.
 Important Definitions
Definition of Wages:
All Component except Washing Allowance
Over time to be excluded for deciding coverage but to be
included for payment of Contribution.
For employee getting salary less than Rs.130/- per day,
only employer share of contribution to be paid.
Employee covered at the start of any Contribution
Period will stand to be covered till the end of that CPE
even if his wages exceed the limit. Contribution will be
paid on the higher amount.
 BENEFITS
MEDICAL BENEFITS:
Responsibility for Medical Benefits belongs to State
Government.
There are following 3 types of Medical benefits:
TYPE NATURE OF PROBLEMS PROVIDED AT

PRIMARY BASIC AILMENTS ESIS DISPENSARY/

INSURED MEDICAL
PRCTIONERS
SECONDARY BASIC GIVEN AT ESIS
HOSPITALIZATION, HOSPITAL
INCLUDING SURGERIES
TERTIARY HIGHER AT ESIC
(SST) TREATMENT/SURGERIE HOSPITALS/PRIVATE
S TIE UP HOSPITALS

Primary and Secondary treatment available to IP and family

from 1st day of employment.
 BENEFITS
MEDICAL BENEFITS:

Conditions for Super Specialty Treatment:

Continuous employment for 2 years on date of diagnosis
At least 156 days of Contribution paid during immediate 4 CP.
Should be eligible for Sickness Benefits in at least 2 Benefit
Period.
Treatment would be cashless after getting Referral letter from
Medical Superintendant ESIS Chikalthana Hospital.
In emergency can be directly taken to any of the Tie-up Hospital
for treatment and the formality of Referral can be taken later.

Note:
 In case of Employment Injury IP will be eligible for SST treatment from the
first day itself.
 BENEFITS
SICKNESS BENEFITS:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION

SICKNESS 78 days Contribution to Upto 91 days in 2 70 % of

be paid in relevant CPE consecutive Benefit average wages
period

ENHANCED SAME AS ABOVE 07 Days for Men 100 % wages

SB 14 days for Women
For 34 specified long
EXTENDED term disease. Maximum upto 730 80 % of wages
SB 2 year Continuous days.
Employment and 156
days Contribution in 4
CPE
 BENEFITS
DISABLEMENT BENEFITS:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION

DAY 1 of Insurable As long as 90 % of last

TEMPORARY Employment for Temporary wages
DISABLEMEN employment Injury disablement last
T cases
PERMANENT DAY 1 of Insurable As per loss of
DISABLEMEN Employment for For Whole Life Earning
T employment Injury Capacity
cases calculated by
Medical Board
 BENEFITS
DEPENDENTS BENEFIT:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION

DAY 1 of Insurable For Widows whole

DEPENDENT Employment for life or re-marriage. 90 % of wages
BENEFIT employment Injury Son upto age of 25 subject to the
cases years defined ratio of
Daughter till dependents.
marriage
Widowed mother
dependent whole
life
 BENEFITS
MATERNITY BENEFIT:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION

70 DAYS UPTO 26 WEEKS

MATERNITY CONTRIBUTIONS TO 1 month more for 100 % of wages
BENEFIT BE PAID BY THE sickness arising out
INSURED WOMEN IN of pregnancy duly
2 PREVIOUS certified by the
CONTRIBUTION doctor
PERIODS
 BENEFITS
OTHER BENEFIT:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION
CONFINEME IW/Wife of IP is eligible For 2 confinement Rs. 5000/- per
NT if confinement takes only case.
EXPENSES place at location where
ESI Hospital is not
available.
FUNERAL From Day 1 of Insurable For funeral Maximum of
EXPENSES employment expenses on death Rs 10000/-.
of IP
 BENEFITS
OTHER BENEFIT:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION
Unemployment For Loss of Maximum 24 1. 0-12 Months:
Allowance Employment due to : month. 50 % of Last
Closure of Average
Factory/Retrenchment/ Wages
Permanent Disablement 2. 13-24 Months:
due to Non-Employment 25 % of Last
Injury. Average
Contribution to be paid Wages.
for minimum 2 years
 EMPLOYER: Duties and
Responsibilities
Register your Factory/Establishment immediately as
per Reg.
Ensure all your Employees (including Contractors) are
registered immediately on date of joining.
Pay Contribution within 21 days as specified.
Ensure compliance of Contractor employees as well.
Notify the changes in Company Particulars online.
Get the unit inspected within 3 days upon marking by
the Unified Web Portal.
File the Accident Reports within time limit.
Employment Injury:
The Employment Injury should satisfy all the 4
conditions:
Personal Injury to an Employee.
Caused by an Accident or Occupational Disease.
Arising out of employment in a covered Factory/Estt.
In the course of employment in covered factory/Estt.
In case of Commuting Accident:
Apart from the above 4 conditions, there should be
Nexus established between circumstances, time and
place in which the accident occurred and the
Employment
 PENAL ACTION FOR NON
COMPLIANCE
Non Payment/Delayed Payment of Contribution:
Assessment as per Sec 45-A will be done.
Interest will be charged @ 12 % pa
Damages will be imposed @ upto maximum of 25 %
Criminal and Civil Prosecution will be initiated under Sec
85 (a) to (g) which will attract fine and imprisonment upto
3 year maximum.
Recovery Action like attachment of Bank accounts,
Property and Arrest could be initiated for non payment.
For Delaying Registration of IP’s, Prosecution of
violation of Reg 12 to 14 will be taken along with
recovery of any benefit payment made to Ips/Dependents
under Sec 68.
 Revenue Generation and Sharing
Expenditure on Medical Care
Revenue is Generated only by way of Contribution.
As per Sec 58 of the Act the State Govt to provide
Medical Arrangement.
Expdt on Medical Care is shared by ESIC with State
Govt in Ratio 7/8th to 1/8th within the Ceiling.
The Ceiling limit was Rs 1500/- pa per IP family
which has been increased to Rs 2150/- for year 2016-
17. (43
No of % UP)Ceiling Limit
Registered Amount 7/8th Share paid
Ips in SRO (IP*Ceiling by ESIC to State
Aurangabad. limit) Govt.
1.5 lakh Rs 1500/- 22.5 crores 19.70 crores

1.5 lakh Rs 2150/- 32.25 crores 28.22 crores

 Statistical Data
 All India Data regarding Revenue and Expenditure:

Head of A/c 2013-14 2014-15 % Growth

Income 9632 crore 10870 crore 13 %`

Medical Expdt 4860 crore 5715 crore 18 %

Cash Benefits 599 crore 685 crore 15 %

Share of
Medical Expdt 50 % 53 %

 % of Administrative Expenditure is around 8.9 % of Revenue

which is less than the limit of 15 % fixed by Government
 NEW INITIATIVES TAKEN FOR
IMPROVEMENT
All the transaction done in IT Enabled Environment.
Employers have been empowered totally.
No documentation asked for registration of employers/Ips
Only E-payment through Net Banking by Employer
leading to real-time credit of contribution.
Single Insurance No which is valid in entire India for IP’s.
All benefit payment directly deposited to the account of
Ips.
No ESI related record to be kept manually as all will be
available in system.
No manual filing of 6 monthly Returns.
Simplified Inspection Policy with transparent system
generated marking through Labour Ministry UWP.
 NEW INITIATIVES TAKEN FOR
IMPROVEMENT
Liberal Improvements in Cash benefits
Definition of family and dependents modified
Eligibility criteria reduced from 3 years to 2 year for RGSKY.
Period of benefits in RGSKY and Maternity benefits increased.
Amnesty to reduce Litigation was launched.
District wise implementation of scheme initiated.
Coverage limit increased to Rs 21000/-
New scheme by name of SPREE launched from 20/12/16.
LIN (Labour Identification Number ) verification being
done.
Migrating to One Unit Identifier concept.
 NEW INITIATIVES TAKEN FOR
IMPROVEMENT
 Action for Improving Medical Services:
 From 2016-17 onwards the Ceiling amount raised to Rs 3000/- from the present
Rs. 2150/- (40% more funds for Medical)
 Upgradation of dispensaries to mini 6 bedded centres.
 ESIS dispensaries to be shifted to new modern locations and rent to be paid by
ESIC.
 ESIC is involved in improving the infrastructure of ESIS Hospital through
Hospital Development Committees.
 ESIC is exploring to provide directly through PPP Model for
 Dialysis, Path Labs, X-ray, Dental services.
 ICU, Ultra Sound, Oncology,
 Engagement of Hospital Manager, IT Manager/Assistant for ESIS
Hospitals.
 ESIC is also providing Manpower on Contract basis (Medical Officers and Para-
medics) to tide over the shortage in the ESIS Hospitals
 ESIC is requesting the State Governments to establish Subsidiary State Level
Corporation for running Medical Services.
 INITIATIVES
At SRO Aurangabad
 Pendency in Benefit Settlement:
 Death Cases
 12 cases we have settled within 3 months and balance we will be
settling in the next 15-20 days.
 Permanent Disablement Cases
 As on date we have 50-60 cases lined up for reference to Medical
board.
 SSMC has constituted Medical Board at local level in ESIS Hospital
itself.
 Examples
Insurance No of Dependents
Name of IP Benefits Paid
Contribution being DB
provided :
Rate Sanctioned
2503090754 Dilip Bornare Rs 1776/- Rs 338/-per day (Rs
10140)
2503090522 Rahul Rs 200/- Rs 291/- pd (Rs 8730/-)
Choudahri
2503120637 Yunus Gani Sk Rs 500/- Rs. 408/- pd (Rs. 12240/-)
2503057306 Kaka Rs. 2933/- Rs 342/- pd (Rs. 10260/-)
Rakhunde
THANK YOU ALL