THE EMPLOYEE’S STATE

INSURANCE ACT, 1948

Presented By :
Dr. Vaibhav Tiwari and
Birendra Kumar
 HISTORY OF THE ACT
• Enacted as EMPLOYEES’ STATE INSURANCE ACT, 1948 on 19th.
April, 1948 , amendments made on 2010

• Extends to whole India.

• The promulgation of ESI Act was the first major legislation on

multidimensional social Security system 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.
 OBJECTIVE
 Is to secure

 sickness, maternity, disablement benefits for

employees of factories / establishments .
 medical benefits for an employment injury.
 medical benefits for Occupational hazard.

 Also secure dependents’ benefits to the dependents of

such employees.
 EMPLOYEE STATE INSURANCE
CORPORATION

• The ESIC is the premier social security organization in

the country.

• It is the highest policy making and decision taking

authority under the ESI Act.

• Representatives of the central and state governments,

employers , employees , medical profession parliament.
 Functions
1. Enhancing efficiency in collection of contribution.

2. Arrange Medical Care Services to the ESI beneficiaries

3. Disburse cash benefit to dependents under different

benefits.

4. Implementing ESI Scheme to new areas.

 Functions
5. Surveys and Inspections of factories / establishments.

6. Recruiting manpower.

7. Organizing Training for its personnel.

8. Organizing awareness program among the stake holders

 Constitution & Term of Corporation
The term of corporation is for Four years and shall comprise of :

 Union minister of Labour – Chairman

 Central Govt. Nominee – Vice Chairman

 Members from Organization of Employers (10)

 Members from Organization of Employees (10)

 Member of Parliament ( Lok Sabha) (2)

 Member of Rajya sabha ( Council of state) (1)

 Members nominated from each State govt.

 Members from Medical Profession (2)

 Director General of ESIC – Ex officio member

COVERAGE OF ESI ACT
• Under Sec 2(12), the act is applicable to the factories
employing 10 or more persons irrespective of whether
power is used in the process of manufacturing or not.

• Under Sec 1(15) ,the scheme has extended to private

medical institutions and educational institutions
employing 20 or more.

• The existing wage limit under this act is Rs.15,000 per

month.
 NON-COVERAGE OF
ESI ACT
• Seasonal factories
• Mines
• Railway running sheds
• Government or establishments or Indian naval military
or air force.
• Other Govt. notified exempted establishments
ESI CONTRIBUTION SHARE

Employer’s Employee’s Total ESI

ESI ESI contribut
contributio contribution ion
n (4.75%) ( 1.75%) (6.5%)
 Amendments
• Amendments were made on 25 May 2010.

• Few amendments are as follows:

a. The Age Limit Of The Dependants Has Been Enhanced

From 18 To 25 [Sub-Clause (I)

b. Definition Of “Dependents” As Contained In Clause 6A

Of Section 2 Of The Act, will include A Widow, A
Legitimate Or Adopted Son Below The Age Of 25 Years
And An Unmarried Legitimate Or Adopted Daughter.
 Amendments
c. The Definition Of Factory Under Section 2(12) Has Been
Amended To Expand Coverage Of Smaller Factories.

d. Deputy General – ESIC Is Being Made Chairman Of

The Medical Benefit Council To Improve Quality Of
Medical Benefits. (Section 10 Of The Act)

e. The ESIC Corporation Can Now Appoint Consultants

And Specialists On Contract Basis For Better Delivery
Of Super-Specialty Services. (New Proviso Added To
Clause (A) Sub? Section (2) Of Section 17)
 Amendments
f. The Designation Of Inspector Has Been Re-Designated
As “Social Security Officer To Enroll Them As Facilitator
Of The Scheme Rather Than To Act As Mere
Inspectors. (Amendment To Section 45).

g. The ESIC Corporation May Nominate Any Officer Duly

Authorized To Carry Out Re-Inspection Or Test
Inspection Of The Records And Returns Already
Inspected By Social Security Officer. (A New Sub-
Section 4 Added To Section 45 Of The Act).
 REGISTRATION

REGISTRATION (15
FACTORY ESI CODE NO.
DAYS)

FOR AN EMPLOYER
 REGISTRATION

FAMIL
DISPE
FORM Y
NSER
1 PHOT
Y
O
FOR AN EMPLOYEE
ESIC ID
Card

ESIC ID Card
ESI Dispensary
BENEFITS AVIALABLE TO
INSURED EMPLOYEE

SICKNESS MATERNITY DISABLEMENT

DEPENDEN
T MEDICAL FUNERAL
 SICKNESS BENEFITS
• It is payable in the event of sickness resulting in absence
from work and duly certified by an authorised insurable
medical officer/ practitioner.
• The benefit becomes admissible only after an insured
has paid contribution for at least 78 days in a
contribution period of 6 months
• Payment is to be made by the local office within 7 days
of certificate of sickness at a standard rate, which is
not less than 50% of the wages.
MATERNITY BENEFITS
• Confinement-payable for a period of 12 weeks (84 days)
• Miscarriage or Medical Termination of Pregnancy (MTP)-
payable for 6 weeks (42 days) from the date following
miscarriage.
• Sickness arising out of Pregnancy, Confinement,
Premature birth-payable for a period of 1 month.
DISABLEMENT BENEFITS
• Applicable to the employee who is injured in the course of his
employment and is permanently or temporarily disabled or contact
any occupational disease.
• Temporary disablement benefit (TDB).
o Till the incapacity lasts.
o 70% of average daily wage.

• Permanent disablement benefit (PDB).

o For life.
o Depends upon the loss of earning capacity of the workers
which is determined by a Medical Board
DEPENDENT BENEFITS
• Is paid as family pensions to the dependent of a
deceased insured person in the event of death due to
employment injury or occupational disease and is
equivalent to about 70% of the wage.

• ELIGIBLE
a. Window (monthly basis)
b. Son or daughter(25years)
c. Other dependants
 MEDICAL BENEFITS
• Insured worker and members of his family are eligible for
medical care from the very first day of the worker coming
under ESI Scheme.
• 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.
• A worker is also eligible for extended sickness benefit
when he/she is suffering from any one of the long term
34 diseases listed in the Act.
 FUNERAL BENEFITS
• An amount of Rs.10,000/- is payable to the dependents
or to the person who performs last rites from day one of
entering insurable employment.

• The amount is paid either to the eldest surviving member

of the family, or in his absence, to the person who is
actually incur the expenditure on the funeral
 REHABILITATION
ALLOWANCE

Rehabilitation allowance is paid to the insured

persons for each day on which he remain admitted
in an Artificial limb center at double the Standard
Benefit rate.
 RESTRICTIONS
• A person entitled to ESI benefit shall not be entitled to any other
benefit. Further an insured person will not be entitled to receive
for the same period.

1. Both sickness & maternity benefit

2. Both sickness and maternity benefit for temporary disablement
3. Both maternity and disablement benefit for temporary
disablement.

Where a person is entitled to more than one of the benefit, he has

the option to select any one of them.
NECESSARY DOCUMENTS

• ESI REFFERENCE.
• ESI CARD XEROX.
• EMPLOYEMENT LETTER XEROX.
• CAPITATION LETTER.
• RUNNING LETTER.
ADVANTAGES FOR EMPLOYEE
• Less payment, huge benefit.
• Covers self and family members.
• Provides cash benefit.
• Unlimited usage for life time.
• Covers IP and OP facilities including medicine.
• Avail general medical service and super specialty
services also.
 ADVANTAGES FOR
EMPLOYER
• Employers are absolved of their liabilities of providing
medical facilities to employees and their dependents.
• Employers are exempted from the applicability of the : -
(a) Maternity Benefit Act .
(b) Workmen's’ Compensation Act .

• Employers have their disposal, a productivity , well

secured workforce, an essential ingredient for better
productivity.
• 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 shift to the
corporation in respect of insured employees.

• Any sum paid by way of contribution under the

ESI Act is deducted in computing ‘income’ under
the Income Tax Act.
OFFENCE AND PENALITIES
• FALSE STATEMENT : imprisonment or Rs.2000/- or
both.
• FAILURE TO PAYCONTRIBUTION: imprisonment up to
3years.
• FOR OTHER CONTRAVENTION: imprisonment up to 1
year or fine up to Rs.4000/- or both.
• FAILS TO MAKE THE COURT ORDER : fine up to
Rs.1000/- every day
 References
1. www.esic.nic.in

2. K Park

3. SK Jhoshi