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EMPLOYEES’ STATE INSURANCE ACT, 1948

APPLICABILITY OF THE ACT & SCHEME :

IS EXTENDED IN ARE WISE TO FACTORIES USING POWER & EMPLOYEEING 10 OR MORE PERSONS AND NON-POWER USING MANUFACTURING UNIT AND ESTABLISHMENT EMPLOYEEING 20 OR MORE PERSONS UP TO RS. 10000/-P.M. W.E.F. 1.10.2006 IT HAS ALSO BEEN EXTENDED UPON SHOPS, HOTELS, RESTAURANTS, ROADS, MOTOR TRANSPORT UNDERTAKING EQUIPMENT MAINTENANCE STAFF IN THE HOSPITALS.

COVERAGE OF EMPLOYEES

DRAWING WAGES UP TO RS. 10000/- P.M. ENGAGED EITHER DIRECTLY OR THROUGH CONTRACTOR.

RATE OF CONTRIBUTION OF THE WAGES.

TOTAL : 6.5 %

EMPLOYERS : 4.75 %

EMPLOYEES : 1.75 %


THE ESIC SCHEME TODAY :

NO.OF IMPLEMENTED CENTRES : 677

NO. OF EMPLOYERS COVERED : 2.38 LACS

NO. OF INSURED PERSONS : 85 LACS

NO. OF BENEFICIARIES : 330 LACS

NO. OF REGIONAL OFFICES/SRO’S : 26

NO. OF ESI HOSPITALS : 183

NO. OF ESI DESPENSARIES : 1453

NO. OF PANEL CLINICS : 2950


MANNER AND THE TIME LIMIT FOR MAKING PAYMENT OF CONTRIBUTION

THE TOTAL AMOUNT OF CONTRIBUTION (EMPLOYEE’S SHARE AND EMPLOYER’S SHARE) IS TO BE DEPOSITED WITH THE AUTHORISED BANK THROUGH A CHALLAN IN THE PRESCRIBED FORM IN QUADRUPLICATE ON OR BEFORE 21st OF THE MONTH FOLLOWING THE CALENDER MONTHI IN WHICH THE WAGES FALL DUE.

BENEFITS TO THE EMPLOYEES UNDER THE ACT

MEDICAL, SICKNESS, EXTENDED SICKNESS FOR CERTAIN DISEASES, ENHANCED SICKNESS, DEPENDENTS MATERNITY, BESIDES FUNERAL EXPENSES, REHABILITATION ALLOWANCE, MEDICAL BENEFIT TO INSURED PERSON AND HIS SPOUSE.


WAGES FOR ESI CONTRIBUTIONS

REGISTER/FILES TO BE MAINTAINED BY THE EMPLOYER’S

TO BE DEEMED AS WAGES

• BASIC PAY

• DEARNESS ALLOWANCE

• HOUSE RENT ALLOWANCE

• CITY COMPENSATORY ALLOWANCE

• OVER TIME WAGES (BUT NO TO TAKEN INTO ACCOUNT FOR DETERMINING THE COVERAGE OF AN EMPLOYEE)

• PAYMENT FOR DAY OF REST

• PRODUCTION INCENTIVE

• BONUS OTHER THAN STATUTORY BONUS

• NIGHT SHIFT ALLOWANCE

• HEAT, GAS & DUST ALLOWANCE



REGISTER/FILES TO BE MAINTAINED BY THE EMPLOYER’S

TO BE DEEMED AS WAGES

• PAYMENT FOR UNSUBSTITUTED HOLIDAYS

• MEAL / FOOD ALLOWANCE

• SUSPENSION ALLOWANCE

• LAY OFF COMPANSATION

• CHILDREN EDUCATION ALLOWANCE (NOT BEING REIMBURSEMENT FOR ACTUAL TUTION FEE)



NOT TO BE DEEMED AS WAGES

•CONTRIBUTI ON PAID BY THE EMPLOYER TO ANY PENSION/PROVIDENT FUND OR UNDER ESI ACT

• SUM PAID TO DEFRAY SPECIAL EXPENSES ENTAILED BY THE NATURE OF EMPLOYMENT-DAILY ALLOWANCE PAID FOR THE PERIOD SPENT ON TOUR

• GRATUITY PAYBLE ON DISCHARGE

• PAY IN LIEU OF NOTICE OF RETRECHMENT COMPANSATION

• BENEFITS PAID UNDER THE ESI SCHEME

• ENHANCEMENT OF LEAVE

• PAYMENT OF INAM WHICH DOES NOT FORM PART OF THE TERMS OF EMPLOYMENT

• WASHING ALLOWANCE FOR LIVERY

• CONVEYANCE AMOUNT TOWARDS REIMBURSEMENT FOR DUTY RELATED TO JOURNEY.


CONTRIBUTION PERIOD

HALF YEARLY RETURNS

FORM - 6

• 1st APRIL TO 30th SEPTEMBER

SUBMIT ON OR BEFORE 11th NOVEMBER

• 1st OCTOBER TO 31st MARCH

SUBMIT ON OR BEFORE 12th MAY


BENEFIT PERIOD

IF THE PERSON JOINED INSURABLE EMPLOYMENT FOR THE FIRST TIME SAY ON 5th JANUARY, HIS FIRST CONTRIBUTION PERIOD WILL BE FROM 5th JANUARY TO 31st MARCH AND HIS CORREPONDING FIRST BENEFIT WILL BE FROM 5th OCOTBER TO 31st DECEMBER.

FORMALITIES :

FORM 3 - DECLARATION FORM SUBMIT WITH IN 7 DAYS OF JOINING

FORM – 15 ACCIDENT BOOK

FORM – 16 IN CASE OF DEATH REPORT TO BRANCH MANAGER ESIC LOCAL OFFICE WITHIN 48 HOURS


PENALTIES

DIFFERENT PUNISHMENT HAVE BEEN PRESCRIBED FOR DIFFERENT TYPES OF OFFENCES IN TERMS OF SECTION 85 :

1. SIX MONTHS IMPRISONMENT AND FINE Rs.5000

2. ONE YEAR IMPRISONMENT AND FINE

• AND SECTION 85 – A

FIVE YEARS IMPRISONMENT AND NOT LESS TO 2 YEARS

• AND SECTION 85 – C (2) OF THE ESI ACT WHICH ARE SELF EXPLANTORY. BESIDE THESE PROVISIONS, ACTION ALSO CAN BE TAKEN UNDER SECTION 406 OF THE IPC IN CASES WHERE AN EMPLOYER DEDUCTS CONTRIBUTIONS FROM THE WAGES OF HIS EMPLOYEES BUT DOES NOT PAY THE SAME TO THE CORPORATION WHICH AMOUNTS TO CRIMINAL BREACH OF TRUST.


SUMMARY

THE ESI ACT PROVIDES FOR MEDICAL HELP AND UMEMPLOYMENT INSURANCE TO INDUSTRIAL WORKERS DURING THEIR ILLNESS. THE BASIC OBJECTIVE IS TO OFFER SOCIAL INSURANCE TO WORKERS IN RESPECT OF THREE CONTIGENCIES 1. SICKNESS, 2. EMPLOYMENT INJURY AND 3. CHILD BIRTH. THE MAIN FEATURS OF THE ACT ARE AS FOLLOWS :

COVERAGE : THE ACT APPLIES TO ALL FACTORIES, OTHER THAN SEASONAL FACTRORIES, RUN WITH POWER AND EMPLOYING 20 OR MORE EMPLOYEES. IT COVERS ALL TYPES OF WORKER – MANUAL, SUPERVISORY OR ADMINISTRATIVE WHOSE REMUNERATION IN AGGREGATE DOES NOT EXCEED Rs.3000 PER MONTH.

ADMINISTRATION : THE ADMINISTRATION OF THE ACT, HAS BEEN GIVEN TO THE EMPLOYEES’ STATE INSURANCE CORPORATION (ESIC). IT IS AN AUTONOMOUS BODY SET UP BY AN ACT OF THE CENTRAL GOVERNMENT. THE ESIC BOARD HAS REPRESENTATIVES FROM STATE GOVERNMENT, EMPLOYERS, EMPLOYEES, MEDICAL PROFESSION AND PARLIAMENT.

FUNDS : THE ESIC SCHEME IS A COMPULSORY AND CONTRIBUTORY HEALTH INSURANCE SCHEME. UNDER THE SCHEME, THE EMPLOYER CONTRIBUTE 4.75% OF WAGES AND THE EMPLOYEE CONTRIBUTES 1.75% OF HIS OWN WAGES. THE SCHEME IS OPERATED THROUGH THE ESI FUND, WITH GRANTS AND CONTRIBUTIONS FROM CENTRAL, STATE GOVERNMENTS AND LOCAL AUTHORITIES.


SUMMARY

BENEFITS : UNDER THE SCHEME, THE INSURED PERSON GETS PRIMARILY, THREE TYPES OF MEDICAL HELP. 1. OUTPATIENT MEDICAL CARE THROUGH DISPENSARIES SET UP IN VARIOUS CENTRES. 2. LABORATORY AND TESTING EXPENSES. 3. HOSPITALISATION CHARGES. THE SCHEME PROVIDES THE FOLLOWING BNEFITS TO MORE THAN 80 LACS ISURED EMPLOYEE HOUSEHOLD THROUGH AN EXTENSIVE NETWORK OF OFFICES SITUATED IN OVER 550 CENTERS THROUGHOUT THE COUNTRY.

SICKNESS BENEFITS : ABOUT HALF WAGES UPTO 90 DAYS SICKNESS.

MATERNITY BENEFITS : ALL INSURED WOMEN ARE ENTITLED TO RECEIVE CASH PAYMENT FOR CONFINEMENT, MISCARRIAGE OF SICKNESS ARISING OUT OF PREGANANCY. THEY ARE ENTITLED TO RECEIVE FULL WAGES FOR LEAVE UPTO 12 WEEKS, OF WHICH NOT MORE THAN SIX WEEKS MUST PRECEDE THE EXPECTED DATE OF DELIVERY. IF THE INSURED WOMAN DIES DURING THE PERIOD OF CONFINEMENT, HER NOMINEE WILL GET THE BENEFITS FOR THE ENTIRE PERIOD.

DISABLEMENTS’ BENEFITS : IF A PERSON DIES FROM EMPLOYMENT INJURIES HIS WIDOW AND CHILDREN ARE ENTITLED TO COMPENSATION TO BE PAID IN A CERTAIN RATIO, (e.g. THE WIDOW TILL HER REMARRIAGE, THE SON UPTO 18 YEARS OF AGE, THE DAUGHTER UPTO 18 YEARS OF AGE OR MARRIAGE WHICH EVER IS EARLIER.


SUMMARY

FUNERAL BENEFITS : WHEN AN INSURED PERSON DIES, THE ELDEST MEMBER OF THE FAMILY OR OTHER DEPENDENT OR FRIENDS AS THE CASE MAY BE, IS ENTITLED TO RECEIVE Rs.100 TOWARDS FUNERAL EXPENSES. THE AMOUNT SHOULD BE CLAIMED WITH IN THREE MONTHS OF THE DEATH.

ASSESSMENT : THE ESI SCHEME HAS BEEN CRITICIZED ON THE FOLLOWING GROUNDS :

• EVEN WITHIN THE ORGANISED SECTOR, THE COVERAGE OF THE SCHEME HAS BEEN SOMEWHAT LOW.

• THE SCHEME HAS NOT BEEN POPULAR WITH EMPLOYEES AND UNIONS. THE STATE GOVERNMENT , TOO, HAVE NOT SHOWN ENTHUSIASM TO IMPLEMENT THE PROVISIONS OF THE SCHEME SINCERELY. EMPLOYEES HAVE OFTEN COMPLAINED ABOUT THE INADEQUACY OF FACILITIES AND BENEFITS. MOST OF THEM HAD TO SPEND ADDITIONAL AMOUNTS OF MONEY FOR BUYING MEDICINES NOT AVAILABLE IN ESI DISPENSARIES.

• THERE IS DELAY IN PROVIDING BENEFITS TO INSURED WORKERS. THE PENALTIES FOR ANY DEFAULT IN PAYMENT OF CONTRIBUTION BY THE EMPLOYER ARE QUITE SEVERE (INCLIDING FINE & IMPRISONMENT). HOWEVER, EMPLOYERS ARE RARELY BOOKED FOR VIOLATIONS ON VARIOUS COUNTS.

Economy & Finance

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