THE EMPLOYEES’ STATE INSURANCE ACT – 1948

•PIONEERING MEASURE IN SOCIAL INSURANCE IN INDIA.

•HEALTH INSURANCE FIRST DISCUSSED IN 1927 BY INDIAN LEGISLATURE.

•SCHEME ENTRUSTED TO PROF. B.P. ADARKAR IN MARCH 43 AND SUBMITTED BY HIM IN DEC 44.

•ORIGINALLY CALLED “WORKMEN’S STATE INSURANCE BILL” 1946.

•CAME INTO FORCE ON 19TH APRIL 1948.

•PROVIDES FOR CASH BENEFITS AND MEDICAL FACILITIES TO EMPLOYEES IN SICKNESS, MATERNITY AND EMPLOYMENT INJURY.

APPLICABILITY

• ACT APPLIES TO FACTORIES USING POWER not using AND EMPLOYING 20 OR MORE PERSONS. GRADUALLY EXTENDED TO THE FOLLOWING:

• SMALLER POWER-USING FACTORIES WITH 10-19 PERSONS

• NON-POWER FACTORIES WITH 20 OR MORE PERSONS• SHOPS• HOTELS AND RESTAURANTS• CINEMAS INCLUDING PREVIEW THEATERS• NEWSPAPER ESTABLISHMENTS• ROAD MOTOR TRANSPORT UNDERTAKINGS

EMPLOYING 20 OR MORE PERSONSSTATE GOVT MAY COVER OTHER ESTABLISHMENTS IN

CONSULTATION WITH THE ESI CORPORATION AND WITH APPROVAL OF THE CENTRAL GOVT.

DEFINITIONS

EMPLOYEE: EMPLOYEE REFERS TO ANY PERSON EMPLOYED ON WAGES IN CONNECTION WITH THE WORK OF A FACTORY OR ESTABLISHMENT TO WHICH THIS ACT APPLIES.

•INCLUDES TECHNICAL, MANUAL, CLERICAL AND SUPERVISORY FUNCTIONS

•PERSONS WITH REMUNERATION UPTO RS.6500 ARE COVERED UNDER THE ACT.

•NO DISTINCTION BETWEEN CASUAL AND TEMPORARY EMPLOYEES OR TECHNICAL AND NON-TECHNICAL, OR TIME-RATE OR PIECE-RATE

•COVERS ADMIN STAFF AND THOSE IN PURCHASE

•DOES NOT INCLUDE NAVAL, MILITARY OR AIR FORCE PERSONNEL.

DEFINITIONS (CONTD.)

WAGES: MEANS ALL REMUNERATION PAID IN CASH, INCLUDING PAYMENT IN PERIOD OF LEAVE, LOCKOUT OR STRIKE WHICH IS NOT ILLEGAL. DOES NOT INCLUDE:

•CONTRIBUTION PAID TO THE PROVIDENT FUND OR PENSION FUND

•TRAVELLING ALLOWANCE

•SUM PAID TO DEFRAY SPECIAL EXPENSES

•GRATUITY PAYABLE ON DISCHARGE

CONTRIBUTIONS

• MAIN SOURCES OF FINANCE ARE CONTRIBUTIONS FROM EMPLOYERS AND EMPLOYEES, AND 1/8TH SHARE OF EXPENSES BY STATE GOVERNMENTS.

• EMPLOYEE’S CONTRIBUTION 1.75% OF WAGES• EMPLOYER’S CONTRIBUTION 4.75% OF TOTAL WAGES• TOTAL AMOUNT TO BE DEPOSITED IN THE STATE

BANK OF INDIA OR OTHER AUTHORISED BANK BY 21ST OF THE MONTH FOLLOWNG THE MONTH WHEN THE WAGES BECAME DUE.

• AN EMPLOYER WHO FAILS TO PAY WITHIN THE SPECIFIED PERIOD IS LIABLE FOR FINES AND DAMAGES FOR LATE PAYMENT

• EMPLOYEES WITH DAILY WAGES BELOW RS 40 ARE EXEMPT; HOWEVER EMPLOYER’S CONTRIBUTION APPLICABLE.

REGISTRATION

•REGISTRATION OF A FACTORY/ESTABLISHMENT WITH THE EMPLOYEES’ STATE INSURANCE CORPORATION (ESIC) IS A STATUTORY RESPONSIBILITY OF THE EMPLOYER UNDER SECTION 2-A AND 10-B.

•DECLARATION OF REGISTRATION IN FORM 01 TO BE FURNISHED TO THE APPROPRIATE REGIONAL OFFICE WITHIN 15 DAYS OF THE ACT BECOMING APPLICABLE.

•EMPLOYER SHOULD GET THE DECLARATION FORM FILLED IN BY EVERY EMPLOYEE COVERED UNDER THE SCHEME.

MAINTENANCE OF REGISTERS

THE STATUTORY REGISTERS TO BE MAINTAINED UP TO DATE ARE:

(A)REGISTER OF EMPLOYEES

(B) ACCIDENT BOOK IN WHICH EVERY ACCIDENT TO EMPLOYEES DURING THE COURSE OF EMPLOYMENT IS RECORDED

(C)INSPECTION BOOK (TO BE PRODUCED BEFORE AN INSPECTOR OR AUTHORISED OFFICER.)

ADMINISTRATION

• THE SCHEME IS ADMINISTERED BY THE ESIC (EMPLOYEES’ STATE INSURANCE CORPORATION)

• CHAIRMAN: UNION MINISTER FOR LABOUR

• COMPRISES GROUPS LIKE EMPLOYERS, EMPLOYEES, PARLIAMENT, STATE AND CENTRAL GOVT. AND THE MEDICAL PROFESSION.

• A STANDING COMMITTEE DRAWN FROM THIS BROAD BASED BODY IS RESPONSIBLE FOR POLICY, PLANNING AND DECISION MAKING.

ADMINISTRATION (CONTD.)

• THE CHIEF EXECUTIVE OFFICER OF THE CORPORATION IS– DIRECTOR GENERAL OF ESIC– EX OFFICIO MEMBER OF THE CORPORATION– MEMBER OF THE STANDING COMMITTEERESPONSIBLE FOR– FORMULATION OF POLICY– OVERALL SUPERVISION– CO-ORDINATION AND LIAISON WITH CENTRAL

AND STATE GOVERNMENTS.• ESIC HAS SET UP REGIONAL OFFICES ALL OVER

INDIA. EACH OFFICE IS UNDER THE CHARGE OF THE REGIONAL DIRECTOR WHO MAINTAINS RECORDS AND ADMINISTERS LOCAL OFFICES.

BENEFITS

1. SICKNESS AND EXTENDED SICKNESS BENEFIT

2. MATERNITY BENEFIT3. DISABLEMENT BENEFIT4. DEPENDANTS’ BENEFIT5. MEDICAL BENEFIT6. FUNERAL BENEFIT7. REHABILITATION BENEFIT

SICKNESS AND EXTENDED SICKNESS BENEFIT

• REPRESENTS PERIODICAL PAYMENTS MADE TO AN INSURED PERSON FOR THE PERIOD OF CERTIFIED SICKNESS AFTER COMPLETING 9 MONTHS IN INSURABLE EMPLOYMENT.

• TO QUALIFY, CONTRIBUTIONS SHOULD BE FOR MINIMUM 78 DAYS IN THE RELEVANT PERIOD.

• MAXIMUM DURATION FOR BENEFIT IS 91 DAYS.

• RATES OF PAYMENT VARY FROM RS.14-125 PER DAY, I.E. AVERAGE OF 50% OF DAILY WAGES.

• INSURED PERSONS SUFFERING FROM TB, LEPROSY, MENTAL AND MALIGNANT DISEASES OR OTHER SPECIFIED LONG TERM DISEASES ARE ENTITLED TO EXTENDED BENEFITS AT HIGHER RATES, PROVIDED HE HAS BEEN CONTINUALLY EMPLOYED FOR AT LEAST TWO YEARS.

MATERNITY BENEFIT

• IMPLIES CASH PAYMENT TO AN INSURED WOMAN IN CASE OF CONFINEMENT OR MISCARRIAGE OR SICKNESS ARISING OUT OF PREGNANCY OR PREMATURE BIRTH.

• WOMAN SHOULD HAVE CONTRIBUTED FOR MINIMUM 70 DAYS IN THE PRECEDING TWO CONSECUTIVE CONTRIBUTION PERIODS.

• DAILY RATE OF BENEFITS DOUBLE THE STANDARD SICKNESS BENEFIT RATE, I.E. FULL WAGES.

• NORMALLY PAYABLE FOR MAX 12 WEEKS FOR CONFINEMENT AND 6 WEEKS FOR MISCARRIAGE OR MEDICAL TERMINATION OF PREGNANCY.

• PAYABLE EVEN IN THE EVENT OF THE DEATH OF THE WOMAN.

DISABLEMENT BENEFIT

• IN CASE OF TEMPORARY DISABILITY ARISING OUT OF EMPLOYMENT INJURY, THIS BENEFIT IS ADMISSABLE FOR THE ENTIRE PERIOD CERTIFIED BY AN INSURANCE MEDICAL OFFICER/PRACTITIONER FOR WHICH THE INSURED PERSON DOES NOT WORK FOR WAGES.

• RATE PAYABLE NOT LESS THAN 70% OF DAILY WAGES; MINIMUM 3 DAYS OF INCAPACITY REQUIRED.

• IN CASE INJURY RESULTS IN PERMANENT, PARTIAL OR TOTAL LOSS OF EARNING CAPACITY, PERIODICAL PAYMENTS TO BE MADE FOR LIFE. ONE-TIME LUMPSUM IS PERMISSIBLE IN CERTAIN CASES.

DEPENDANTS’ BENEFIT

PERIODICAL PENSION PAID TO DEPENDANTS OF DECEASED WHERE DEATH OCCURS OUT OF EMPLOYMENT INJURY OR DISEASE.

• WIDOWS: 3/5TH OF BENEFIT RATE FOR LIFE OR UNTIL REMARRIAGE

• CHILDREN: 2/5TH OF BENEFIT RATE UNTIL 18• TOTAL AMOUNT DISTRIBUTED NOT TO EXCEED

CEILING OF DISABLEMENT BENEFIT.• BENEFIT NOT PAID TO MARRIED DAUGHTERS.• IN CASE THERE IS NO WIDOW OR CHILD, BENEFIT

CAN BE PAID TO OTHER DEPENDANTS INCLUDING PARENTS.

• AMOUNT PAID IS REVIEWED AND INCREASES GRANTED FROM TIME TO TIME TO COMPENSATE FOR EROSION IN REAL VALUE AND COST OF LIVING.

MEDICAL BENEFIT

• INSURED PERSONS AND THEIR FAMILIES ENTITLED TO FREE, FULL AND COMPREHENSIVE MEDICAL CARE.

• EXTENDED UPTO TWO YEARS FOR CHRONIC AND LONG-TERM DISEASES.

• TREATMENT CONTINUES EVEN IF PERSON GOES OUT OF COVERAGE, TILL SICKNESS ENDS.

• PACKAGE COVERS ALL ASPECTS OF HEALTH CARE FROM PRIMARY TO SUPER-SPECIALIST FACILITIES, SUCH AS:

1. OUT-PATIENT TREATMENT

2. DOMICILIARY TREATMENT

3. SPECIALIST CONSULTATION AND DIAGNOSTIC FACILITIES

MEDICAL BENEFIT (CONTD.)

1. IN-PATIENT TREATMENT

2. FREE SUPPLY OF DRUGS AND DRESSING

3. X-RAY AND LABORATORY INVESTIGATIONS

4. VACCINATION AND PREVENTIVE INNOCULATIONS

5. ANTE-NATAL, CONFINEMENT, POST-NATAL CARE

6. AMBULANCE SERVICE OR CONVEYANCE CHARGES

7. FREE DIET DURING ADMISSION IN HOSPITALS

8. FREE SUPPLY OF ARTIFICIAL LIMBS, AIDS AND APPLIANCES FOR PHYSICAL REHABILITATION

9. FAMILY WELFARE SERVICES AND OTHER NATIONAL HEALTH PROGRAMME SERVICES

10. MEDICAL CERTIFICATION

11. SPECIAL PROVISIONS INCLUDING SUPER-SPECIALITY TREATMENT.

FUNERAL BENEFIT

• FUNERAL EXPENSES ARE IN THE NATURE OF A LUMP SUM PAYMENT UPTO A MAXIMUM OF RS.2500 MADE TO DEFRAY THE EXPENDITURE OF THE FUNERAL OF DECEASED INSURED PERSON.

• THE AMOUNT IS PAID EITHER TO THE ELDEST SURVIVING MEMBER OF THE FAMILY OR, IN HIS ABSENCE, TO THE PERSON WHO ACTUALLY INCURS THE EXPENDITURE ON THE FUNERAL.

REHABILITATION BENEFIT

THE CORPORATION GRANTS REHABILITATION ALLOWANCE TO THE INSURED PERSONS FOR EACH DAY ON WHICH THEY REMAIN ADMITTED IN AN ARTIFICIAL LIMB CENTRE, ON THE RATES, WHICH GENERALLY CONFORM TO DOUBLE THE STANDARD SICKNESS BENEFIT RATE.

ALL BENEFITS UNDER THE ESI SCHEME ARE PAID IN CASH EXCEPT MEDICAL BENEFIT, WHICH IS

GIVEN IN KIND.

RESTRICTIONS

A PERSON ENTITLED TO ESI BENEFITS 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 AND MATERNITY BENEFIT, OR

2. BOTH SICKNESS AND MATERNITY BENEFIT FOR TEMPORARY DISABLEMENT, OR

3. BOTH MATERNITY AND DISABLEMENT BENEFIT FOR TEMPORARY DISABLEMENT.

WHERE A PERSON IS ENTITLED TO MORE THAN ONE OF THE BENEFITS, HE HAS AN OPTION TO SELECT ANY ONE OF THEM.

PROTECTION

AN EMPLOYER CANNOT DISMISS OR PUNISH AN EMPLOYEE UNDER TREATMENT FOR SICKNESS OF IN RECEIPT OF ANY BENEFIT OR ABSENT FROM WORK DUE TO ILLNESS. ANY NOTICE OF DISMISSAL, DISCHARGE OR REDUCTION IS INVALID. HOWEVER, THE EMPLOYER CAN DISCHARGE OR PUNISH THE EMPLOYEE IF:

• HE HAS RECEIVED TEMPORARY DISABLEMENT BENEFIT AND REMAINED ABSENT FOR 6 MONTHS OR MORE

• IS UNDER TREATMENT FOR SICKNESS OTHER THAN TB OR ARISING OUT OF PREGNANCY AND REMAINED ABSENT FOR 6 MONTHS OR MORE

• IS UNDER MEDICAL TREATMENT FOR TB OR A MALIGNANT DISEASE AND HAS REMAINED ABSENT CONTINUOUSLY FOR 18 MONTHS OR MORE.

PENALTIES AND DAMAGES

• IF A PERSON COMMITS AN OFFENCE AFTER BEING CONVICTED BY A COURT, EVERY SUBSEQUENT OFFENCE ATTRACTS IMPRISONMENT UPTO 1 YEAR OR FINE UPTO RS.2000 OR BOTH.

• IF THE SUBSEQUENT OFFENCE IS FOR FAILURE TO PAY CONTRIBUTION, PUNISHMENT WILL BE UPTO 1 YEAR AND NOT LESS THAN 3 MONTHS, AND FINE UPTO RS.4000.

• CONTRIBUTION CAN BE RECOVERED THROUGH THE DISTRICT COLLECTOR AS ARREARS OF LAND REVENUE.

• EMPLOYER IS LIABLE FOR 6% INTEREST P.A. FOR EACH DAY OF DEFAULT OR DELAY IN PAYMENT OF CONTRIBUTION.

• POWER TO LEVY DAMAGES IS DISCRETIONARY AND IN THE NATURE OF A QUASI-LEGAL PROVISION. REASONABLE OPPORTUNITY TO THE EMPLOYER TO BE GIVEN BEFORE LEVYING DAMAGES.

MISCELLANEOUS

• CASH BENEFITS PAYABLE UNDER THE ESI ACT ARE NOT LIABLE TO ATTACHMENT OR SALE IN EXECUTION OF ANY COURT DECREE OR ORDER.

• RIGHT TO RECEIVE BENEFIT IS NOT TRANSFERABLE.

• DISPUTES UNDER THE PROVISIONS OF THE ACT TO BE DECIDED BY THE EMPLOYEES’ INSURANCE COURT (EIC) AND NOT BY A CIVIL COURT. APPEALS TO THE HIGH COURT ONLY BY AN ORDER OF THE EIC ON A QUESTION OF LAW.

• PERIOD OF LIMITATION FOR APPEAL IS 60 DAYS.

OBLIGATIONS OF EMPLOYERS

1. GET HIS FACTORY REGISTERED WITHIN 15 DAYS OF THE ACT BECOMING APPLICABLE, BY SUPPLYING INFORMATION IN PRESCRIBED FORM. OBTAIN CODE NUMBER.

2. ARRANGE ALLOTMENT OF INSURANCE NUMBER TO ALL EMPLOYEES COVERED BY THE ACT BY COMPLETING THEIR DECLARATION FORMS AND SUBMITTING THEM TO THE REGIONAL OFFICE.

3. ASSIST EMPLOYEES IN OBTAINING THEIR IDENTITY CERTIFICATES, AND PENDING THIS ISSUE CERTIFICATES OF EMPLOYMENT TO ENABLE EMPLOYEES TO AVAIL OF CASH AND MEDICAL BENEFITS MEANWHILE.

OBLIGATIONS OF EMPLOYERS (CONTD.)

1. HE SHOULD NOT DISMISS OR PUNISH ANY EMPLOYEE DURING PERIOD OF MEDICAL TREATMENT OR IF ABSENT FROM WORK AS A RESULT OF ILLNESS.

2. MAINTAIN UP TO DATE REGISTERS AND RECORDS OF THE ESTABLISHMENT AND AFFORD FACILITIES FOR EASY INSPECTION.

3. REIMBURSEMENT TO THE CORPORATION EXCESS EXPENDITURE INCURRED DUE TO INSANITARY WORKING AND LIVING CONDITIONS IN THE ESTABLISHMENT OR HOUSING COLONY OF ITS EMPLOYEES.

OBLIGATIONS OF EMPLOYEES

1. ASSIST EMPLOYER IN OBTAINING REGISTRATION, INSURANCE NUMBER AND ID CARDS FROM THE ESI AUTHORITIES.

2. OBTAIN NECESSARY SICKNESS/OTHER CERTIFICATES FROM THE MEDICAL AUTHORITIES FOR CLAIMING CASH BENEFITS.

3. GIVE PROPER NOTICE TO EMPLOYER OF ACCIDENT CAUSING EMPLOYMENT INJURY AND SUBMIT FOR MEDICAL EXAMINATION AS AN WHEN NECESSARY TO CLAIM BENEFITS.

4. REPAY TO THE ESIC ANY BENEFIT TO WHICH HE WAS NOT ENTITLED.

5. SUBMIT CLAIMS WITHIN PRESCRIBED TIME ALONG WITH PRESCRIBED DOCUMENTS.