The Employees' State Insurance Scheme is a social insurance program that provides sickness, maternity, disability and death benefits to insured employees. It is managed by the Employees' State Insurance Corporation, which has representatives from central and state governments, employers, employees and medical professionals on its board. The scheme is funded through contributions amounting to 6.5% of wages, with 1.75% paid by employees and 4.75% paid by employers.

1. ESIC

2.  The Employees’ State Insurance Scheme
is an integrated measure of Social
Insurance embodied in the Employees’
State Insurance Act and is designed to
accomplish the task of protecting
‘employees’ as defined in the Employees’
State Insurance Act against the hazards of
sickness, maternity, disablement and
death due to employment injury and to
provide medical care to insured persons
and their families.

3. Constitution of Corporation
 A Chairman and a vice chairman to be appointed
by the Central Government;
 one person each representing each of the States in
which this Act is in force to be appointed by the
State Government concerned;
 one person to be appointed by the Central
Government to represent the Union territories;
 Persons representing employers to be appointed by
the Central Government in consultation with such
organizations of employers as may be recognized
for the purpose by the Central Government;
cont…

4. Cont…
 Ten persons representing employees to be appointed by
the Central Government in consultation with such
organisations of employees as may be recognised for the
purpose by the Central Government;
 Two persons representing the medical profession to be
appointed by the Central Government in consultation with
such organizations of medical practitioners as may be
recognised for the purpose by the Central Government;
 Three members of Parliament of whom two shall be
members of the House of the People (Lok Sabha) and one
shall be a member of the Council of States (Rajya Sabha)
elected respectively by the members of the House of the
people and the members of the Council of States; and
 The Director General of the Corporation, ex officio.

5. Act Applicability:
The ESI Act 1948 applies to
 Non – seasonal Factories using power in and
Employing ten (10) or More persons
 Non – seasonal and non- power using
factories and establishments employing
twenty(20) or more persons
 Employees of the Factories and
Establishments in receipt of wages not
exceeding Rs.10,000 /- Per month are
covered under this Act.

6. Contribution:
 The Scheme is primarily funded by contribution raised from
Insured Employees and their employers
 Payable such as
1. Employees’ Contribution – 1.75% of the Wages
2. Employers’ Contribution – 4.75% of the Wages
TOTAL - 6.5 % of the Wages
Employees in receipt of an average daily wage of
Rs.40/- or Less, are exempted from Payment of their
share of contribution (w.e.f 8.4.00) but are entitled to all
social security benefits under the Scheme.
Cont…

7. Cont…
 Employees covered under the ESI Act, are required
to pay contribution towards the scheme on a
monthly basis. A contribution period means a six
month time span from 1st April to 30th September
and 1st October to 31st March.
 Cash benefits under the scheme are generally
linked with contributions paid. The benefit period
starts three months after the closure of a
contribution period. The two type of periods are
elucidated below.
Contribution Period Benefit Period
1st April to 30th September 1st January to 30th June
of the following year
1st October to 31st March 1st July to 31st Dec.

8. Benefits of ESIC – At A
Glance

9. Medical Benefits
 The Scheme provides full range of medical care to
Insured person and family, through a network of ESI
Dispensaries & Panel clinics, diagnostic centres and
ESI Hospitals etc. Super speciality facilities are
provided to the beneficiaries through recognised
advanced medical institutions empanelled for the
purpose on referral basis. The Corporation has set
up a revolving fund in most of the States to ensure
smooth flow of funds for super-speciality treatment
of ESI beneficiaries.

10. Sickness Benefits
 Sickness Benefit represents periodical
cash payments made to an IP during the
period of certified sickness occurring in a
benefit period when IP requires medical
treatment and attendance with
abstention from work on medical
grounds.

11. Maternity Benefits
 Maternity benefit consists of periodical
cash payments in case of confinement or
miscarriage or sickness arising out of
pregnancy, confinement, premature
birth of child or miscarriage, to an insured
woman as certified by a duly appointed
medical officer or mid wife.

12. Disablement benefit
Disablement benefit is admissible for
disablement caused by employment
injury. At the first instance, temporary
disablement benefit is payable as long
as the temporary disability lasts. If the
employment injury results in partial or
total/permanent disability, permanent
disablement benefit is payable till the
death of the insured person.

13. Dependant Benefits
 Dependants benefit is paid as family pension
to the dependants 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 wages.

14. Funeral Expenses
 Funeral expenses are in the nature of a lump
sum payment unto a maximum of Rs. 2500/-
made to defray the expenditure on 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.

15. Rehabilitation:
 Physical rehabilitation
Insured Persons who suffer physical
disablement due to employment injury are
provided artificial appliances or other physical
aids such as wheel chairs, crutches, dentures
and spectacles etc.

16.  Vocational Rehabilitation
The Corporation at its cost arranges for
the vocational rehabilitation of
disabled insured persons provided the
disability has been assessed at above
40 percent and the beneficiary is not
over 45 years of age. The training is
provided at vocational rehabilitation
centres run by the Govt. of India etc.
The fee charged or Rs.123/- a day
whichever is more, travelling expenses
etc are borne by the Corporation.

17. Levy of Interest & Damages …
 Under Section 39(5)(a) of the ESI act, read with Regulation 31(A)
of the ESI (General) Regulations 1950, the employer is liable to
pay simple interest at the rate of 15 percent per annum in
respect of each day of default or delay in payment contributions.
In addition, under the Provision of Regulation 31-C of ESI
(General) Regulations, 1950, read with sec.85(B)(i) of the ESI
Act, the Corporation is empowered to recover damage as under:
Period of delay in Rate of Damages
payment of Contribution on the amount due
i). Up to less than 2 months 5%
ii). 2 months and above but less than 4 months 10%
iii).4 months and above but less than 6 months 15%
iv). 6 months and above 25%
Interest and damages can also recovered as arrears of land
revenue Section 45(c) to Section 45(I) by the Recovery Officer of
ESI Corporation.

18. Obligation of the Employers …

19. Obligation of the Employers …
1). Get the Factory / establishment registered with in
15 days after the Act becomes applicable. Submit
Form 01 to the Regional office for this purpose.
Obtain Employer’s code No. for use in all ESIC Forms
/ documents and correspondence with the offices
of the ESI Corporation.
2). Fill up Declaration Forms in respect of all coverable
employees and submit the same to the Regional
Office/ Local Office of the corporation well before
the ‘Appointed Day’ and obtain insurance
Numbers from the concerned Local Office/
Regional Office, In respect of newly appointed
employees, fill up the declaration form soon after
appointment of such employees and submit the
same to the Local Office Concerned.

20. Obligation of the Employers …
3). Pending receipt of identity cards/ identity
certificates you may issue “certificate of
employment” in Form 86 to the covered
employee(s) enabling them to avail
cash/medical Benefits.
4). Pay ESI contribution (Employee's Share
@4.75% and the Employer’s share @ 1.75% of
the wages) with in 21 days of the month
following, in which the wages fall due.

21. Obligation of the Employers …
5).Maintain an Accident Book as prescribed
under the Factory Act / ESI Act.
6).Submit an Accident Report to the Local
Office / ESI Dispensary concerned immediately
in respect of accidents that could result in
death or disablement and within 24 hours of its
occurrence otherwise. Minor accidents which
do not cause absence from work need not be
reported
7).Grant leave to insured employees on the basis
of sickness certificates issued by any authorized
ESI doctor.

22. Obligation of the Employers …
Maintain the following records/ registers properly for
the purpose of inspection
2. Attendance Registers / Muster Rolls (in respect of
all employees including those employed through
contractors)
3. Wage register
4. Cash Book / Bank Book
5. Account Books including Ledgers and Vouchers,
Balance Sheet.
6. Employees’ Register
7. Accident Book
8. Returns of Contribution
9. Return of Declaration Forms
10. Copies of Challans
11. Inspection Book

23. Obligation of the Employers …
9. Submit return of contribution within 42 days of the
expiry of contribution period.
10. Intimate the date of closure of shifting (Temporary
or Permanent) of the Factory / Establishment to the
Regional office / Local Office within seven days of
its closure or shifting
11. Promptly report change in business activity,
ownership of the concern or its management.
12. Ascertain the liability towards ESI dues, while
taking over the ownership of any
factory/establishment by purchase, gift, lease or
license or in any other manner whatsoever as new
owner is liable to discharge the past liabilities if any.

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