Employees State Insurance

Corporation Act,1948
Brief details

-By P.B.S. KUMAR

pbskumar2000@yahoo.com
General Obligations of Employer

To seek registration of Factories and Establishments

To complete declaration Form
To submit declaration for and return in Form 3
To assist the Corporation
To arrange the identity cards for the Employees
To issue certificate of Employment
To issue certificate of contribution rate on leaving employment
To pay interest and damages on contribution due but not paid in time

…….Contd.2
General Obligations of Employer
Page 2

To maintain register of Employees

To furnish particulars in respect of abstention of an insured person
To maintain accident book, as prescribed
To send a report of accident within specified period
To arrange first aid appliances / facilities
To furnish further particulars of accident
To report death if it is by employment injury
To maintain inspection book, as prescribed
Not to take punitive action during sickness period
APPLICBILITY OF THE ACT & SCHEME

Is extended in area – wise to factories using power

and employing 10 or more persons and to non-power
using manufacturing units and establishments
employing 20 or more person upto Rs. 10,000 /- per
month. It has also been extended upon shops, hotels,
restaurants, roads motor transport under takings,
equipment maintenance staff in the hospitals.
Coverage of Employees
Drawing wages up to Rs. 10,000/- per month
 Engaged either directly or through contractor
RATE OF CONTRIBUTION OF THE
WAGES
 Employers’ @ Rs. 4.75 %

 Employees’ @ Rs. 1.75 %

THE ESI 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 / Annexes 1453
 No.of Penal Clinics 2950
Manner and 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 month
following the calendar month 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
or her spouse.
WAGES FOR ESI CONTRIBUTIONS
TO BE DEEMED AS WAGES
•Basic pay
•Dearness allowance
•House rent allowance
•City compensatory allowance
•Overtime wages (but not to be taken
into account for determining the
coverage of an employee)
•Payment for day of rest
•Production incentive
•Bonus other than statutory bonus
•Nightshift allowance
• Payment for un-substituted holidays
• Meal / food allowance
• Suspension allowance
• Lay off compensation
• Children education allowance
• Heat, Gas & Dust allowance
NOT TO BE DEEMED AS WAGES
• Contribution paid by the employer to any
• Sum paid to defray special expenses
• Gratuity payable on discharge
• Pay in lieu of notice retrenchment
• Benefits paid under the ESI Scheme
• Encashment of leave
• Payment of Inam which does mean part
of employment
• Washing allowance for livery
• Conveyance Amount towards
reimbursement for duty related journey
CONTRIBUTION PERIOD
• 1st Aril to 30th September
• 1st October to 31st March

BENEFIT PERIOD
If the person joined insurable employment for the first time, say on 5 th
January, his / her first contribution period will be from 5th January to
31st March and his corresponding first benefit will be from 5th October
to 31st December
 PROCEDURE FOR AVAILING
MATERNITY BENEFIT
• Maternity benefits are available under the provisions of ESI
Act. Duration of maternity benefit is 12 weeks in case of
normal delivery and 6 weeks in case of miscarriage. The
period can be extended by 4 weeks on medical advice.

• Maternity benefit is available subject to the condition of

payment of contribution for a minimum of 60 days in one or
two consecutive contribution periods and the rate of payment
is double the standard benefit rate i.e. approximate full
wages. The can be claimed on the basis of medical certificate
issued by the dispensary which has to be deposited in local
office and local office will make payment.
 MAINTENANCE OF RECORDS
i. Attendance Register in respect of all the employees including employees engaged
by immediate employer / contractor
ii. Wage Register
iii. Register under Regulation 32
iv. Accounts Book
v. Cash Book / Books of Account ledgers, petty cash book including bills and
vouchers
vi. Other relevant records to show the labour charges paid to the labour engaged in
construction, repair & maintenance etc.,
vii. Inspection Book
viii. Form 7 monthly contribution particular of relevant employees details

Note : Most of the forms are supplied by the ESI

Local office with free of cost
 PENALTIES

• Different punishments have been prescribed for different types of

offences in terms of Sec.85 (i) (six months imprisonment and fine
Rs. 5000/-), (ii) (one year imprisonment and fine), and 85-A: (five
years imprisonment and not less to 2 years) and 85-C (2) of the ESI
Act, which are self explanatory. Besides 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.