Employees' State Insurance Act, 1948

What is E.S.I. Scheme ?

The Employees’ State Insurance Scheme is an integrated measure of Social

Insurance is designed to accomplish the task of protecting ‘employees’ against
the hazards of sickness, maternity, disablement and death due to employment
injury and to provide medical care to insured persons and their families.

The ESI Act applies to any factory ( or) establishment where 10 (or) more
coverable persons employed in a geographical area notified for implementation of
the ESI Scheme and drawing wages up to 15000/- (or) less.
 ESI WAGES

 Wages means all remuneration paid ( or) payable in cash to an employee, If

the terms of the contract of employment , express (or) implied, were fulfilled
and includes any payment to an employee in respect of any period of
authorized leave, lockout , strike which is not illegal (or) layoff and other
additional remuneration, if any paid at intervals not exceeding two months but
does not include.
 Any contribution paid by the employer to any pension fund. ( OR) Provident
fund (or) under this Act.
 Any traveling allowance (or) the value of any traveling concession.
 Any sum paid to the person employed to defray special expenses entailed on
him by the nature of his employment (or) any gratuity payable on discharge.
 What is wages & what is not wages for ESI contribution

S. No To be deemed as wages Not to be deemed as wages

Contribution paid by the employer to any

1 Basic pay
pension/ provident fund (or) under ESI act.

Any traveling allowance or the value of any

2 Dearness Allowances
travelling concession.

Sum paid to defray special expenses

3 House Rent Allowances entailed by the nature of employment .Daily
allowance paid for the period spent on tour.

4 City compensatory Allowance Gratuity payable on discharge

Over time wages ( but not to be taken

Pay in lieu of notice of retrenchment
5 into account for determining the
compensation
coverage of an employee)
 What is wages & what is not wages for ESI contribution

S. No To be deemed as wages Not to be deemed as wages

6 Payment for day of rest Benefits paid under the ESI Scheme

7 Production incentive Encashment of leave

Payment of Imam which does not form part

8 Bonus other than statutory bonus
of the terms of employment

9 Night shift allowance Washing allowance for liveries

10 Conveyance Allowance  
 What is wages & what is not wages for ESI contribution

S. No To be deemed as wages Not to be deemed as wages

11  Heat , gas & dust allowance  

12 Meals/ Food /Tea allowance  

13 Suspension allowance  

14 Lay off compensation  

Children education allowance ( Not

15 being reimbursement of actual tuition  
fees)
 ESI Contribution

 ESI is a contributory scheme in which both employer and employee contribute at

the rate prescribed in ESI ( Central Rules 1950).

 Contribution is an amount payable to the ESI Corporation by the Principal
Employer in respect of an Employee.
Contributions
Employee 1.75%
Employer 4.75%
Total 6.5%

 This amount is payable within in 21 days from the closing of wage period
through a challan in a designated SBI branch by the Principal Employer
 Contribution period and Benefit period

 There are two contribution periods of 6 months duration in a year in

respect of an employee with corresponding benefit of 6 month each as
under.

Contribution period Corresponding Benefit period

1st April to 30th September 1st January to 30 th June of the year following

1st October to 31st March of the year

1st July to 31st December of the calendar year
following
 Contribution period and Benefit period

• In case of an person becomes an employee within the meaning of the act

for the first time, the first contribution period will commence from the date he
enters in to insurable employment for the first time.

• The benefit period will commence on the expiry of 9 months from the date of
such employment.

• In case of new employee the Employer will have to ascertain from the
person appointed whether he was previously registered under the ESI act
and if so he may be asked to produce ID card.

• If he produce the same no fresh Declaration Form is required from him. The
Insurance number already allotted will hold good.
 DEFINATION OF FAMILY

Family means all ( or) any of the following relatives of the insured person.
1. Spouse
2. A minor legitimate or adopted child depending upon the insured person

3. A child who is wholly dependent on the earnings of the insured person and who is
a. Receiving education till he ( or) she attends the age of 21 years
b. Unmarried daughter

4. A child who is infirm by reason of any physical or mental abnormality (or ) injury and is wholly
dependent on the earnings of the insured person so long as the infirmity continuous.

5. Dependent parents whose income from all sources does not exceed such income as may be
prescribed by the Central Government.

6. Incase the insured person is unmarried and his (or) her parents are not alive , a minor brother or
sister wholly dependent upon earnings of the insured person.
BENEFITS UNDER ESI SCHEME
BENEFITS UNDER ESI SCHEME
BENEFITS UNDER ESI SCHEME
BENEFITS UNDER ESI SCHEME
 Procedure for claiming benefits
under ESI scheme

Medical Benefit:

Eligible from day one of entering into insurable employment by producing the TIC/PIC at
dispensary for self and family.

Sickness Benefit:

A claim for sickness benefit can be made only on the basis of medical certificate issued
by the ESI doctor.

The insured person (I P) is required to deposit this certificate in the box provided at the
concerned ESI branch office ( or) at the dispensary (or) by post within 3 days from the
date of issue of the certificate.

He can go to ESI Corporation Branch Office on the same day and claim for cash benefit.

Extended Sickness Benefit:

The same procedure to be followed as applicable for claiming sickness benefit. However
here the IP has to appear before Medical Referee When referred by the Branch Office
Manager.
 Procedure for claiming benefits
under ESI scheme

Temporary Disablement benefit:

The procedure is the same like that of sickness benefit but here the IP who sustains
employment injury ( EI) has to give notice or information to the Employer . The
Employer has to send accident report to the Branch office in Form 12 immediately ( or)
within 48 hours as per regulation 68 of ESI act. In case of death of an insured person due
to employment injury the report should be sent immediately to the Branch Manager.

Permanent Disablement benefit:

The IP has to submit an application for reference to Medical Board on plain paper after
the Termination of Temporary Disablement Benefit. i.e., at the time of Final Certificate.
He should give age proof The required Form B 11 (a) certificate indicating residual
incapacity will be issued by the IMO / IMP. These Papers will be sent to the Medical
Board by Branch Office concerned .
Contd…
 Procedure for claiming benefits
under ESI scheme

Funeral Expenses:

A claim in the appropriate Form duly attested by competent authority as mentioned in the
claim Form has to be submitted to ESIC branch office by the bereaved family along with
the death certificate of the Insured person. An amount of Rs. 5000/- will be paid to the
family.

Other benefit

1. The employment allowance for a period of six months due to closer of factory /
establishment. (or) retrenchment.
2. Old age medical care for self and spouse at a nominal fee of Rs 120 pm payable at ESIC
Branch Office
3. Physical rehabilitation with free supply of artificial appliances.
4. Vocational rehabilitation on permanent disablement.
5. Immunization family welfare service besides pre natal & post natal care in respect of
female beneficiaries.
Thank You