The Employees' State Insurance Act, 1948

ESI Scheme of India, is a multidimensional social security system tailored to provide socio-economic protection to worker population and their dependents covered under the scheme.

1. The Employees' State Insurance Act, 1948

2. Index Introduction Object of the Act Applicability of the Act Non-Applicability of the Act Definitions Employees’ State Insurance Corporation Standing Committee Medical Benefit Council ESI Contribution ESI Benefits Penalties and Damages Conclusion

3. Introduction ESI Scheme of India, is a multidimensional social security system tailored to provide socio-economic protection to worker population and their dependents covered under the scheme. • Pioneering measure in social insurance in India . • Originally called “workmen’s state insurance bill” 1946. • Came into force on 19th April 1948.

4. Object of the Act It is to provide certain benefits to employees in case of sickness, maternity and employment injury   to employees of factories and establishments and also to make provisions for certain other matter incidental thereto.

5. Applicability of the Act The provisions of the Act is extended and its also applicable to:- Smaller power-using factories with 10-19 persons Non-power factories with 20 or more persons Shops Hotels and restaurants Cinemas including preview theatres Newspaper establishments Road motor transport undertakings employing 20 or more persons

6. Non-Applicability of the Act The Act, however, does not apply to mine or railway running shed, and specific seasonal factories The state government may extend the provisions of the Act to cover other establishments or class of establishments. Industrial, commercial, agriculture or otherwise, in consultation with ESI Corporation and with the approval of the central government, after getting six months notice of its intention to do so in the O fficial Gazette.

7. Definitions Employee: Any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or Immediate Employer: In relation to employees employed by or through him, means a person who has undertaken the execution on the premises of a factory or an establishment to which this Act applies or under the supervision of the principal employer or his agent . Principal Employer: In this behalf or where no authority is so appointed, the head of the department ; In a factory, the owner or occupier of the factory and includes the managing agent of such owner or occupier, In any establishment under the control of any department of any government in India, the authority appointed by such government and any other establishment, any person responsible for the supervision and control of the establishment

8. Employees’ State Insurance Corporation Central Government may has established administrative body for the administration of the scheme of Employees’ State Insurance in accordance with the provisions of this Act a Corporation to be known as the Employees’ State Insurance Corporation. The Corporation shall consist of the following members, namely : - A Chairman to be appointed by the Central Government A Vice-Chairman to be appointed by the Central Government Not more than five persons to be appointed by the Central Government One person each representing each of the in which this Act is in force ] to be appointed by the State Government concerned One person to be appointed by the Central Government to represent the Union territories P ersons representing employers to be appointed by the Central Government in consultation with such organisations of employers as may be recognised for the purpose by the Central Government Persons representing employees to be appointed by the Central Government in consultation with such organisations of employees as may be recognised for the purpose by the Central Government T wo persons representing the medical profession to be appointed by the Central Government in consultation with such organisations of medical practitioners as may be recognised for the purpose by the Central Government T hree members of Parliament of whom two shall be members of the House of the People (Lok Sabha) and one shall be a member of the Council of States (Rajya Sabha) elected respectively by the members of the House of the People and the members of the Council of States The Director-General of the Corporation, ex-officio.

9. Standing Committee A Standing Committee of the Corporation shall be constituted from among its members, consisting of: - A Chairman appointed by the Central Government T hree members of the Corporation appointed by the Central Government 8 members elected by the Corporation representing employers , employees, medical profession and Parliament Standing committee is empowered to: Shall administer the affair of the corporation   Shall submit the consideration and decision of the corporations   Have discretion on other issues of corporation

10. Medical Benefit Council The Central Government shall constitute a Medical Benefit Council consisting of: - The director general, the employees’ state insurance corporation, ex-officio as chairman The director general, health services, ex-officio as co-chairman The medical commissioner of the corporation, ex-officio One member each representing each of the states other than union territories in which this act is in force to be appointed by the state government concerned Three members representing employers to be appointed by the central government in consultation with such organizations of employers as may be recognized for the purpose by the central government Three members representing employees to be appointed by the central government in consultation with such organizations of employees as may be recognized for the purpose by the central government ; and Three members, of whom not less than one shall be a woman, representing the medical profession, to be appointed by the central government in consultation with such organizations of medical practitioners as may be recognized for the purpose by the central government.

11. Duties of Medical Benefit Council The Medical Benefit Council shall: - Advise the Corporation and the Standing Committee on matters relating to the administration of medical benefit, the certification for purposes of the grant of benefits and other connected matters Have such powers and duties of investigation as may be prescribed in relation to complaints against medical practitioners in connection with medical treatment and attendance P erform such other duties in connection with medical treatment and attendance as may be specified in the regulations.

12. ESI 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 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 For newly implemented areas, the contribution rate is 1% of wages of Employee and 3% payable by Employers for first 24 months Employees in receipt of a daily average wage upto Rs.137/- are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.

13. 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 15 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 . Contribution Period and Benefit Period Contribution Period Cash Benefit Period 1st April to 30th Sept. 1st Jan of the following year to 30th June 1st Oct to 31st March of the year following. 1st July to 31st December.

14. ESI Benefits ALL BENEFITS UNDER THE ESI SCHEME ARE PAID IN CASH EXCEPT MEDICAL BENEFIT, WHICH IS GIVEN IN KIND.

15. Sickness And Extended Sickness Benefit Represents periodical payments made to an insured person for the period of certified sickness after completing 9 months in insurable employment . To qualify, contributions should be for minimum 78 days in the relevant period . Maximum duration for benefit is 91 days . Rates of payment vary from rs.14-125 per day, i.e. Average of 50 % of daily wages. Maternity Benefit Implies cash payment to an insured woman in case of confinement or miscarriage or sickness arising out of pregnancy or premature birth. Woman should have contributed for minimum 70 days in the preceding two consecutive contribution periods. Daily rate of benefits double the standard sickness benefit rate, i.e. Full wages. Normally payable for max 12 weeks for confinement and 6 weeks for miscarriage or medical termination of pregnancy .

16. Disablement Benefit In case of temporary disability arising out of employment injury, this benefit is admissible for the entire period certified by an insurance medical officer/practitioner for which the insured person does not work for wages. Rate payable not less than 70% of daily wages; minimum 3 days of incapacity required. In case injury results in permanent, partial or total loss of earning capacity, periodical payments to be made for life. One-time lump sum s permissible in certain cases. Dependents' Benefit Periodical pension paid to dependents of deceased where death occurs out of employment injury or disease. Widows : 3/5th of benefit rate for life or until remarriage Children : 2/5th of benefit rate until 18 Total amount distributed not to exceed ceiling of disablement benefit . Benefit not paid to married daughters.

17. Medical Benefit Treatment continues even if person goes out of coverage, till sickness ends. Package covers all aspects of health care from primary to super specialist facilities , such as : Out-patient treatment Domiciliary treatment Specialist consultation and diagnostic facilities X Ray and Lab Investigations Ambulance services etc. Funeral Benefit Funeral Expenses : An amount of Rs.10,000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment .

18. Penalties and Damages Punishment for false statement :- In this case any false statement or false representation, shall be punishable with imprisonment up to Rs.2000 or with both Punishment for failure to pay contributions :- if any person fails to pay any contribution which under to this act he is liable to pay, he shall be punishable with imprisonment up to three years. Punishment for other contravention :- in contraventions like dismisses, discharges, reduces or otherwise punishes an employee, shall be punishable with imprisonment up to one year or with fine up to Rs.4000 or with both Power to recover damages :- If employer fails to pay the amount of contribution then corporation may recover from the employer by way of penalty Power of court to make orders :- If court makes order for employer- if employer is not able to make this order within period then employer shall be punishable with imprisonment in respect thereof U/S.85 and shall also be liable to pay fine up to Rs.1000 for everyday .

19. Coverage IT covers all the states except Manipur and Arunachal Pradesh also, it covers all union territories except Dadra & Nagar Haveli, Daman & Diu and Lakshadweep Islands . The scheme is notified in 325 complete Districts out of 393 Districts, where scheme was partially implemented and 89 Districts Headquarters out of non implemented Districts . Coverage(As on 31st March, 2016 ) No. of Insured Person family units 2.13 Crores No. of Employees 1.89 Crores Total No. of Beneficiaries 8.28 Crores No. of Insured women 3.78 Lacs No. of Employers, etc 7.83 Lacs Coverage(As on 31st March, 2017 ) No. of Insured Person family units 3.19 Crores Total No. of Beneficiaries 12.37 Crores

20. Conclusion This act provides Social Security scheme for employees drawing wages not exceeding ₹21000/-. This scheme framed under the act aims at providing for certain cash benefits to employees in the event of sickness, maternity, employment injury and medical facilities in kind . This a ct also has provisions to identify the employees who are entitled to get benefits.

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