The Employees' State Insurance Act, 1948

INTRODUCTION
The Act provides for medical attendance and treatment (in kind), cash benefits during sickness, maternity and employment injury, pension for dependants on the death of workers due to employment injury and funeral towards expenses on funeral of insured person.. Wherever the E.S.I. Scheme is extended the employers are absolved of their liability under the Employees’ Compensation Act, 1923 and under the Maternity Benefit Act, 1961 from the date from which maternity benefit becomes payable under the E.S.I. Act.
 
1. Applicability
a. All factories employing 10 or more persons,excluding mines subject to the operation of the Mines Act or a railway running shed and seasonal factories.
b. An Establishment covered under the Shops & Establishments Act, 1948 employing 20 and more coverable employees for carrying out the business activity.
  Note :- Coverable employees means employee drawing Gross Salary upto & including Rs.15,000/- (w.e.f. 1st May, 2010).
c. Once Act applies, it continues to apply even if employment strength falls below the statutory limit.
  Note:- As soon as the above conditions are fulfilled the employer should furnish details in Form- 01 to ESI office for registration under the ESI Act , 1948 for obtaining of the employer’s Code No. within 15 days of its applicability for the first time.
 
2. ELIGIBILITY
a. Any person employed for wages (upto Rs.15,000/-) a month, excluding remuneration for overtime work in or in connection with the work of a factory or establishment.
b. Any person who is directly employed by the employer in a factory or through his agent on work which is ordinarily part of the work of the factory or incidental to purpose of the factory.
c. Any person who is classified as disabled employee and working in the private sector, with monthly wages upto Rs.25,000/- per month provided they are appointed on or after 01.04.2008.In this case, the employer’s share will be paid by the Central Government for 3 years.
 
3. REGISTRATION OF FACTORY / ESTABLISHMENT (EMPLOYER)
Online registration of the establishment in Form – O1 on ESI website within 15 days of the applicability of the Act.
 
4. REGISTRATION OF EMPLOYEES i.e. INSURED PERSON 
The Code Number of the Factory/ Establishment having been received from the Regional office and the employees who are coverable under the Act having been identified, the next step is registration of employees of the factory/establishment, registration of employees of branch offices/sales offices/head office.In respect of each and every covered employee, online declaration form is to be filled on the ESI website within 15 days from the date of appointment of the employee.
 
5. Contribution Period and Corresponding Benefit Period
There will be two contribution periods of six months each in a year in respect of an employee with corresponding benefit period of six months each, as under:-
 
Contribution Period Corresponding Benefit   Date of Submission of Return
1st April to 30th September 1st January to 30th June of the year following. 11th November
1st October to 31st March 1st July to 31st December of the year following 12th May
In the case of a person who becomes an employee within the meaning of the Act for the first time, the first contribution period will commence from the date he enters into insurable employment for the first time in the contribution period current on that day and his corresponding benefit period will commence on the expiry of nine months from the date of such employment.
Example :If a person joined insurable employment for the first time, say on 5th January 2001, his first contribution period will be from 5th January to 31st March, 2013 and his corresponding first benefit period will be from 5th October, 2013 to 31st December, 2013.
In the case of a 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 the identity card or temporary identification certificate. If he so produces the same, no fresh Declaration Form is required to be filled-in, in respect of such person and the insurance number already allotted will hold good.

  

6. BENEFITS TO EMPLOYEES
The Scheme is based on the principle of single contribution, single administration for comprehensive package of social security benefits that include:
  1. Medical Benefit
  2. Sickness Benefit
  3. Maternity Benefit
  4. Employment Injury Benefit
    1. Temporary Disablement benefit
    2. Permanent Disablement benefit
  5. Dependants' benefit.
In addition, the scheme also provides some other need based benefits to insured workers. These include :
  1. Funeral expenses
  2. Rehabilitation allowance.
  3. Vocational Rehabilitation.
  4. Old age medOld age Medicare
 

E.S.I. Benefits at a glance
 
An interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fixed percentage of the worker's wages whereas they are provided social security benefits according to individual needs without distinction.
 

Table of Standard Benefit Rate (S.B.R.)

 
Penal Provision for non-payment

For employee's contribution : Imprisonment for 1 year to max. 3 years and fine of Rs.10,000/-
For employer's contribution : Imprisonment for 6 months to max. 3 years and/or fine of Rs.10,000/-

 Repeat offence: Imprisonment for 2 to 5 years and fine of 25,000/-
 
 

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