Employee State Insurance Act, 1948
Presented By : Namrata Jadhav 58
Employee State Insurance Act, 1948
• ESI Scheme of India, is a multidimensional social security
system tailored to provide socio-economic protection to
worker population and their dependants covered under the
• Pioneering measure in social insurance in India.
• Originally called “workmen’s state insurance bill” 1946.
• Came into force on 19th April 1948.
• ACT APPLIES TO FACTORIES USING:
• Smaller power-using factories with 10-19 persons
• Non-power factories with 20 or more persons
• Hotels and restaurants
• Cinemas including preview theatres
• Newspaper establishments
• Road motor transport undertakings employing 20 or more persons.
• The Existing Wage Limit for coverage under the ACT is 15,000/-
pm, w.e.f May 01, 2010
ESI Contribution Share
(1.75% of the Gross
(4.75% of the Gross
(6.5% of the Gross
Contribution & Benefit Period
• Employers covered under the ACT, are required to pay the
Contribution towards the scheme on a monthly basis. (every
21st of the month.
• There are 2 Contribution periods each of SIX months and two
corresponding benefit periods also of SIX months like :
Contribution Benefit Period
1st April to 30th Sep 1st Jan to 30th June
1st Oct to 31st March 1st July to 31st Dec
Social Security Benefits (Sec46)
1. Sickness and extended sickness benefit
2. Maternity benefit
3. Disablement benefit
4. Dependants’ benefit
5. Medical benefit
6. Funeral 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
• To qualify, contributions should be for minimum 78 days in the
• 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.
• 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.
• In case of temporary disability arising out of employment
injury, this benefit is admissible 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 lump sum is permissible in certain cases.
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 not paid to married daughters.
• Treatment continues even if person goes out of coverage, till
• 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
4) X Ray and Lab Investigations
5) Ambulance services etc
• Funeral Expenses : 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.
ALL BENEFITS UNDER THE ESI SCHEME ARE
PAID IN CASH EXCEPT MEDICAL BENEFIT,
WHICH IS GIVEN IN KIND.
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.
• 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.