THE EMPLOYEE S STATE INSURANCE ACT, 1948

The object of the Act is:

Is

to secure sickness,disablement and medical benefits for employees of factories and establishments in case of an employment injury or Occupational hazard.
Also

secure dependents benefits to the dependents of such employees.

The Employees' State Insurance Corporation (ESIC) is the premier social security organization in the country. It is the highest policy making and decision taking authority under the ESI Act and oversees the functioning of the ESI Scheme under the Act. The corporation comprises members representing Central and State Governments, employers, employees, Parliament and the medical profession. Union Minister of Labour functions as the Chairman of the Corporation. A Standing Committee constituted from among the members of the Corporation acts as the Executive Body for the administration of the Scheme.

The ESI Act was the first major legislation on social Security for workers in independent India. deployment of manpower in manufacturing processes was limited to a few select industries such as jute, textile, chemicals etc. India took the lead in providing organized social protection to the working class through statutory provisions.

The ESI Act, 1948 applies to:

Non seasonal Factories using power in and Employing ten (10) or More persons. Non seasonal and non- power using factories and establishments employing twenty(20) or more persons Employees of the Factories and Establishments in receipt of wages not exceeding Rs.10,000 /- Per month are covered under this Act.

Seasonal factories Factories exempted as seasonal Mines Railway running sheds Govt. factories or establishments and Indian naval, military, or air force Other Govt. notified exempted establishments

REGISTERATION
The employer should get his factory or establishments registered with the E.S.I. Corporation within 15 days after the Act becoming applicable to it, and obtain the employers Code Number.

1.

Employers are absolved of their liabilities of providing medical facilities to employees and their dependents in kind or in the form of fixed cash allowance, reimbursement of actual expenses, lump sum grant or opting for any other medical insurance policy of limited scope unless it is a contractual obligation of the employer. Employers are exempted from the applicability of the :(a). Maternity Benefit Act (b). Workmen's Compensation Act in respect of employee covered under the ESI Scheme

2.

3. Employers have their disposal, a productivity , well secured workforce, an essential ingredient for better productivity. 4. Employers are absolved of any responsibility in times of Physical distress of workers such as sickness, employment injury or Physical disablement resulting in loss of wages, as the responsibility of Paying cash benefits shits to the corporation in respect of insured employees . 5. Any sum paid by way of contribution under the ESI Act is deducted in computing income under the Income Tax Act

The purpose of the Employee State Insurance Act is to provide benefits as detailed in the Act particularly in section 46, to the insured persons or their dependants. 1. Medical Benefit for self & Family 2. Sickness Benefit for self 3. Maternity Benefit - for self 4. Disablement Benefit a). Temporary Disablement Benefit for self b). Permanent Disablement Benefit for self 5. Dependents Benefit for dependents in case of death due to employment injury

In addition, the Scheme also provides some other need based benefits to insured workers. These are:
1.

2. 3. 4. 5.

Funeral Expenses to a person who performs the last rites of IP Rehabilitation allowances for self Vocational Rehabilitation - for self Old age Medicare for self and spouse Medical Bonus for insured women and IPs wife

Employer not to dismiss or punish employee during period of sickness- section73. A worker who is covered under the scheme for first time is eligible for medical care for the period of three months. If he/she contributes at least for 78 days in a contribution period the eligibility is there up to the end of the corresponding benefit period.

Insured employees is entitled to receive for the period of his sickness as the daily standard benefit rate. Minimum 78 days of the corresponding contribution is must. Benefit is not available for the first 2 days of sickness. Maximum period for benefit is 91 days in one year. Insured persons suffering from long term diseases like T.B., leprosy, mental, heart etc. and who have been continuous employment for two years are entitled to get sickness benefit period up to 309 days.

Standard benefit rate : The daily rate which sickness benefit is payable to an insured employee during the period of his sickness. Lowest rate is Rs. 14/Highest rate is Rs. 195/-

a) Temporary disablement benefit :

In case of temporary disability arising out of an employment injury or occupational disease, Disablement benefit is admissible to insured person for the entire period so certified by an Insurance Medical officer / Practitioner for which IP does not work for wages. The benefit is not subject to any contributory condition and is payable at a rate which is not less than 70% of daily average wages. However, not payable if the incapacity lasts for less than 3 days excluding the date of accident.

b) Permanent Disablement benefit :

Permanent disablement, whether total or partial, as a result of an employment injury ( personal injury caused by an accident arising out of and in the course of employment)RESULTING IN partial or total loss of earning capacity, Periodical payments are made to the IP for life at a rate depending on the actual loss of earning capacity as may be determined and certified by a duly-constituted Medical Board. Benefit for the whole of life.

Dependents Benefit is a monthly pension payable to the eligible dependents of an insured person who dies as a result of an Employment Injury or occupational disease

The amount of benefit shall be paid to the nominee or, where there is no nomination, to the heir or legal representative of the deceased employee.

In case of death of an insured employee, the eldest surviving member of his family, and if the employee had no family or was not living with his family at the time of his death, then the person who actually incurs expenditure on the funeral of the employee, is entitled to receive the a payment called funeral expenses. The claim for the funeral expenses should be submitted with prescribed document and form within three months of the death of the insured employee. Maximum permissible amount of

such payment is Rs. 2500/-

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.

Get your Factory / establishment registered with in 15 days after the Act becomes applicable.

Grant leave to insured employees on the basis of sickness certificates issued by any authorized ESI doctor. Pay ESI contribution (Employee's Share @4.75% and the Employers share @ 1.75% of the wages) with in 21 days of the month following, in which the wages fall due.

Maintain an Accident Book as prescribed under the Factory Act / ESI Act.
Submit an Accident Report to the Local Office / ESI Dispensary concerned immediately in respect of accidents that could result in death or disablement and within 24 hours of its occurrence otherwise.

Exemption of a factory or establishment belonging to Govt./any local authority Exemption from one or more provisions of the act (sec.91) Exemption of a factory or establishment (sec. 87)

Exemption of persons or class of persons (sec. 88)

Form 1 declaration form.

Form 3
return of declaration form. Form 6 return of contribution [half yearly returns]. Form 16 application for accident report.

Form 37 certification of employment. Form 53 dispensary Form 72 card. Form 1B report. application for change of branch office. application for duplicate ESI

change in family declaration

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 upto 1 year or with fine upto Rs. 4000/- or with both

1. Employees : 1.75% on total monthly wages 2. Employer : 4.75% on total monthly wages

1. 2. 3. 4.

The daily rates of sickness benefit as given under rules 55 has been increased by 20 per cent. 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/-

We can conclude by saying that: The ESI Act is very helpful for the daily wage labourers. In most cases, the employees are covered under the act and can get full benefit from it. However, sometimes, the employees can also be made to suffer by not giving them timely help and benefit from the act. Although, the compensation provided in most cases is not enough and doesnt meet the daily requirements, this act has helped the employees in financial, medical and more such benefits.