Employees State Insurance Act

Background

 Relating to social security

 Workmen’s Compensation Act

 Injury by an accident in the course of employment

 Occupational Diseases

 Employer liable for compensation only if worker

works inside the factory
 To secure benefit:

 Sickness,

 Maternity,

 Disablement,

 Employment Injury

 Dependents’ benefits to the dependents of such

employees.
 Liability of claims – Employees State Insurance
Corporation

 Concept of Contributory Principle –

 Benefits are secured by financial contributions

 By the employers

 By the employees
Applicability:

 Applies to whole India

 All the factories(incl. Govt. Factories)

 Not to seasonal factories

Registration:

 Employers to submit particulars of their factory in

Form-01Form-01 Employer's Registration Form.pdf for
Registration and allotment of Code number

 Code Number should be mentioned in

a. Every correspondence with the ESI Corporation

b. Documents and

c. Returns under the act

 Test to determine an establishment is a Factory:

 Manufacturing process is carried on in any part of the

premises

 Prescribed number of persons

 All persons employed for wages should be taken into

account.
ESI does not apply to the following:

 Factories – with power employing less than 10 persons

 Factories - without power employing less than 20 persons

 Seasonal factories, Mines, Railway running sheds

 Govt. factories - employees receive benefits similar or

superior to the benefits provided under this act

 Indian armed forces

 Factory- employees are having wages (excluding

overtime) exceeding Rs. 15,000 p.m.
A person entitled to any benefits provided by this act
not entitled to recover any similar benefits under

 Maternity Benefit Act

 Workmens’ Compensations Act.

Employees State Insurance
Corporation
 Founded on 24th February, 1952

 It consists the representatives of:

 Employers – 10 persons to be appointed by Central Govt.

in consultation with recognized employers organization.

 Employees – 10 persons to be appointed by Central Govt.

in consultation with recognized employees organization.

 Parliament– 3 persons (2 members of Lok Sabha, 1

member of Rajya Sabha)
 Medical Profession – 2 persons to be appointed by Central
Govt. in consultation with recognized medical practitioner
organization.

 Central Government – 1 person to represent Union

territories to be appointed by Central Govt.

 State Government – 1 person each representing each of

States in which the act is in force.

 Director General of the Corporation – ex officio. (CEO)

Powers and Duties of the Corporation

 To promote measures for health etc. of insured person

 Holding of property

 Invest the moneys

 Raise loans

 Constitute Provident and other Benefit fund

Powers and Duties of the Corporation
 Budget estimates

 Accounts

 Audit

 Annual report

 Budget, audited accounts and the annual report to be

placed before Parliament

 Valuation of assets and liabilities

Standing Committee
 Constituted from among its members

 It
is vested with powers to administer the affairs of the
Corporation.

 Exercise any of the powers and perform any functions of

the Corporation subject to control and superintendence of
the Corporation.

 Itis also empowered to constitute any non-statutory sub-

committees for specific purposes as the need be.
Medical Benefit Council
 Itis an advisory body on matters related to the
administration of medical benefit under the ESI Scheme.

 The council is constituted by the Central Govt. for a

specific term

 To advise the Corporation on matters related to

developments and improvements in the medical service
delivery system.
 Employees’ State Insurance Fund
 All contributions paid under this Act

 All other moneys received on behalf of the Corporation

 The Corporation may accept grants, donations and gifts

from the Central or any State Government, local authority,
or any individual or body whether incorporated or not,

 It shall be held and administered by the Corporation

 All moneys accruing or payable to the said Fund shall be
paid into the Reserve Bank of India or

 Suchother bank as may be approved by the Central

Government

 Such account shall be operated on by officers authorized

by the Standing Committee
Contributions
 Contribution period –

 1st April – 30th September

 1st October – 31st March

 Employer – 4.75% of wage

 Employees – 1.75% of wages

Payment of Contribution

 Employers to submit particulars of their factory for

registration

 Allotment of Code Number by ESIC

 List of employees

 Employees ‘Declaration Form’

 Submission in Local or Branch office of ESIC

 Employer liable to pay contributions – employer’s and
employee’s

 Right to deduct employee’s contribution from wages

 Contribution falls due on last day of wage period

 It is to be paid into a bank duly authorized by ESIC

 Employer has to pay contributions by 21st day of the last

day of the calendar month in which it falls due.
 Ifcontribution not paid by the employer – pay simple
interest @ 12% p.a. for each day of default.

 No employee's contribution shall be payable by or on

behalf of an employee whose average daily wages are up
to Rs. 70

 Employer shall bear the expenses of remitting the

contributions to ESIC
 Benefits :

1. Sickness Benefit:
 Periodical payment
 To an insured person
 In case of his sickness

2. Disablement Benefit:
 Periodical payment
 To an insured person
 In case of his disablement as a result of employment
injury

3. Medical Benefit:
 Medical treatment for attendance of the insured person
4. Maternity Benefit :
 Periodical payments
 To an insured woman in case of
 confinement or
 miscarriage or
 sickness arising out of pregnancy, premature birth of child

5. Dependants Benefit:
 Payment
 To the dependant of an insured person
 Who dies as a result of employment injury

6. Funeral Benefit:
 Reimbursement of the expenses
 To the member of family or any other person
 Sickness Benefit:
1. Condition which requires medical treatment and
attendance.

2. Necessitates abstention from work.

3. Claim - during any benefit period.

4. Minimum Contributions to be paid: At least half the

number of days of the corresponding contribution period.

5. Sickness - certified by duly appointed medical

practitioner.

6. Claim - due on the date of issue of medical certificate.

 Daily rate of Sickness – “ Standard Benefit Rate ”

 Benefit Rate depends upon average daily wages of an

insured person.

 Waiting period – first two days of sickness

 Sickness benefit – shall not be paid for more than 91 days

in any 2 consecutive benefit period (in 1 year),

 Sicknessbenefit – shall not be paid for those days on

which he receives wages

 From1.1.2007 – daily rate of sickness benefit shall be

20% more than the Standard Benefit Rate
 Standard Benefit Rate
Average daily wages are  Standard benefit rate 
(in Rs)
Rs. 14 or full average daily
Below Rs.28
wage whichever is less
 Rs.28 and above but below Rs.
16
32
 Rs.32 and above but below
18
Rs.36
 Rs.36 and above but below
20
Rs.40
 Rs.40 and above but below
24
Rs.48
 Rs.48 and above but below
28
Rs.56
 Rs.56 and above but below
30
Average Daily Wages

 Monthly – wages for all working days in a month

26
 Fortnightly - wages for all working days in a fortnight

13
 Weekly - wages for all working days in a week

6
 Daily – amount of wages for working day
 Excessive sickness benefit :

 ESIC incurs excessive amount on sickness benefit –

 Insanitary working conditions.

 Neglect from occupier to observe health conditions.

 Insanitary conditions of any tenement or lodging

occupied by insured person.

 ESIC can recover the amount of extra expenditure from

owner after holding an enquiry.
 Disablement benefit :
 Payable in cash in installment

 To an employee in case of employment injury

 Permanently or temporarily disabled or in case of

occupational disease.

a) Employment Injury:
 Injury must be caused by
 An accident
 Occupational Diseases

 The employment must be insured.

b) Occupational Diseases: Specified in schedule III of this
act.
 Part A of schedule III – No period of employment

 Part B of schedule III – at least 6 months of employment

 Part C of schedule III – period specified by ESIC

c) Temporary Disablement:
 Resulting from employment injury

 Must require medical treatment

 Employee temporary incapable of doing work

d) Permanent partial disablement:

 It reduces the earning capacity of an employee in the

type of work he was doing.

e) Permanent total disablement:

 It renders the employee incapable in all work which he

is capable of doing

 Aggregate percentage of loss of earning capacity

amounts to 100% or more.
 Payment of Disablement Benefit:

 Temporary Disablement – 50% or more than the

standard benefit rate.

 Disablement Benefit – Full Rate.

 Claim – due on date of issue of Medical Certificate.

 Claim of permanent disablement – due on date on which

the insured person is declared as permanently disabled
 Payment of Partial disablement – depends upon loss of
earning capacity.

 All disablement questions are decided by Medical Board.

 A person receiving Disablement benefit is also entitled to

medical benefit.

 An insured person is not entitled to receive for the same

period both sickness and disablement benefit
 Conditions for Sickness Benefit and Disablement Benefit

A person should be under –

1. Medical treatment at -

• Dispensary

• Hospital

• Clinic

2. Observe medical instructions of the medical officers or

medical attendant.
3. Shall not do anything which might retard or prejudice
his chances of recovery.

4. Should not leave the area in which medical treatment

provided without the permission of the medical
officer, medical attendant

5. Shall allow himself to be examined by any duly

appointed medical officer.
 Maternity Benefit:
 Marriage is not a precondition for maternity benefit.

 Minimum contribution – at least 70 days during the

preceding contribution period.

 Woman entitled to receive –

 Twice the Standard Benefit Rate (200%) for 12 weeks
(she doesn’t work for remuneration) or
 Rs. 20 whichever is higher

 12 weeks – out of at least 6 weeks shall precede the

expected date of confinement.

 Claim – due from the date of medical certificate.

 If a woman dies –

 During her delivery or

 During the period immediately following the date of her

delivery.

 Leaving behind a child.

The Maternity benefit is payable for the whole period.

 If child also dies then up to the date of death of child.

 Benefit paid to – Nominee or her legal heirs.

 Miscarriage or Medical Termination of Pregnancy –

 For 6 weeks (where she doesn’t work for remuneration)

 From the date of Miscarriage or Medical Termination of
Pregnancy

 Sickness arising out of pregnancy, premature birth of child

 Additional maternity benefit for a period up to 1 month

 Medical Bonus –

 Rs. 2,500 confinement expenses to insured woman and

wife of an insured person, if confinement occurs in place
where necessary medical facilities under ESI are not
available.
 Medical Benefit:

 Members of IPs family are entitled to free, full and

comprehensive medical care under the Scheme

 The family members of an Insured Person:

 Who reside at the place of work or

 At a place other than the place of work of the IP or

 Who move along with the IP on leave or temporary

transfer will be provided medical care
 The family members can get treatment along with IP

 At the station where the IP is posted permanently/

temporarily

 The facilities of medical benefit will also be provided to

 The family members of IP where the IP works and resides

at one station and his family resides at another station
 Located in the same State or in different states.

 Provided through a network of Panel clinics, ESI

dispensaries and hospitals
 Out patient treatment

 Domiciliary treatment 

 Super specialty treatment

 Specialist consultation  and diagnostic facilities

 In-Patient treatment

 Free supply of drugs and dressings.

 X-ray and laboratory investigations

 Vaccination and preventive inoculations

 Ante-natal care, confinement  and post natal care

 Ambulance Service or conveyance charges for going to

hospitals diagnostic centers, etc. wherever admissible

 Free  diet during admission in hospitals

 Free supply of artificial limbs, aids and appliances for

physical rehabilitation

 Family welfare services and other national health

programme services

 Medical certification
 Dependants Benefit:

 Claim – due on the death of the Insured Person

 Daily rate of dependants benefit – 50 % more than the

standard benefit rate applicable at the time of employment
injury. (Full Rate)

 Widow – monthly basis for life

 A son or daughter – monthly basis till 18 years of age

 Other dependants – under certain conditions for life

A. Dependant’s benefit payable as follows:

1. To the widow during life or until remarriage – 3/5th of

Full Rate

2. If two or more widows – amount payable to be divided

equally.

3. To each legitimate or adopted Son or unmarried

daughter (till the age of 18 years or marriage whichever
is earlier) – 2/5th of Full rate.

4. To each son and daughter who is infirm - continue till

the infirmity lasts or daughter remains unmarried.
B. If IP does not leave behind any of the above dependants
then it shall be payable to other dependants as follows:

1. Parent or Grand Parent for life - 3/10 of the full rate.

2. 2 or more parents or grand parents – equally divided

3. Any other – 2/10 of the full rate

i. Male dependant till 18 years of age

ii. Female dependant – till 18 years of age or marriage
whichever is earlier or if widowed until she attains 18
years of age or remarriage.
iii. more than 1 dependant – to be divided equally
 If a person dies during the period in which he is entitled
to cash benefits –

 Person nominated by him

 To legal heir or representative

 FuneralBenefit:
 Reimbursement of the expenditure made by

1. Eldest surviving member of the family of IP towards

funeral

2. If the IP did not have family or

3. Was not leaving with his family at the time of his

death, to the person who actually incurred the exp.

4. Max. amount allowed Rs. 5,000

5. Claim should be made within 3 months of the date of

death of IP