1. Employees State
Insurance Act,1948
Brief outline.

2. Employees State
Insurance Act,1948.
 This central Act got implemented in
various phases , area wise, across
India.
 This is a massive social welfare
legislation for our organized workforce
, as enshrined in the Constitution of
India.
 This legislation got amended from time
to time in order to extend the benefits
for the working population.

3. Coverage of the Act
 Sec 2(12) ----- where 10 or more persons are
employed , whether power is used or not . This was
amended only in 24.5.10. Previously the limit of
coverage was 20 or more persons .
 Gradually extended to other sectors like hotels,
restaurants, shops, establishment, cinemas, news
papers, , road motor transport etc.
 Wages limit at present stands at Rs 15000/- max per
month. ( from 1.5.2010.)
 Since inception of the statute, it got increased from
time to time . Initial coverage was Rs 500/- per
month.
 Implemented Areas & not implemented areas.
 As on March, 13, total coverage of persons including
family members are 15 crore .

4. Who are covered under
this act ?
 Employees / Sec 2(9) of the Act
 Who are employees?
 Directly employed
 indirectly employed , on the premises
or outside under the direct control of
employer.
 Part time employee/ on contract
employees.
 Whose services are temporarily lent
on.
 5 Distribution or sale of products.

5. Distinction between contract of
service & contract for service.
 Criterion-- Relationship between
master & servant exists or not?
Some examples where relationship
does not exist.
 Apprentices
 electricity repair
 in plant trainees
 construction workers at construction
site.
 TV repairs / plumbing jobs.

6. How to go about the
coverage ?
 Registration of the factories. (Now on line registration is
available.)
 Code No to be allotted by ESIC to the respective
employer.
 Individual declaration of the employees to obtain, before
engaging
 I Card to be issued by ESI to individual employees ( Tem
& permanent)
 Contribution to be deposited by 21st of the next month.
 Employees contribution is 1.75% of the wages
 Employer’s contribution is 4.75%
 Total 6.5%
 Employees who are getting Rs 70/ daily Av wages, no
deduction to be made from them but employer’s share of
4.75% to pay.
 Several Forms / RCC etc to submit monthly, half yearly &
annually.

7. Contribution Period-------Benefit period
 1.4 to 30.9------ 1.1 to 30.6
 1.10 to 31.3----- 1.7 to 31.12
 NB : If some one joins in
between? Example --- if some
one joins say on 5th
jan,
contribution to be deducted till
31.3, his benefit period will start
from 5th
oct to 31.12.

8. Some guidelines :-
 to deduct ESI from the very first day of the
employment
 His/her benefit period will commence after 9 months
only.
 This is only for sickness benefit . Not for accident
benefits.
 Daily standard sickness benefit raised from 150/ per
day to Rs 190 / per day Max
 Presently there are 32 slabs
 RCC to submit after 6 months . On line submissions
can be made now a days.
 Where 40 or more employees are employed, it has to
be certified by CA

9. Benefits under the
scheme …
 Sickness
 Cash payments
 Abstention to work thru valid ESI papers
issued by ESI Panel Doctors.
 Max benefits is for 91 days in a 2
consecutive benefit periods
 2 days waiting period is deducted
 Rate is approx 50% of the individual’s
wages.
 Min 90 days to be present in a contribution
period

10. Extended sickness
 For prolonged diseases
 Higher cash benefits
 70% of av daily wages
 Extended for 2 years

11. Enhanced sickness
benefits…
 For family Planning
 Double the rate of sickness benefit
 Maternity benefit/ miscarriage
 12 weeks ( before & after delivery)
 Cash payments to an insured woman
 Paid contribution at least 80 days in 2
consecutive contribution period.
 Confinement expenses Rs 2500/ each

12. Temp & Permanent
Disablement benefit( cash)
 For employment injury/
occupational disease
 One day’s present is enough
 70% of the daily wages
 No contribution is required
 Proportion to the losses of the
injury
 Fatal cases also

13. Dependent Benefit
 Periodical payment for family members in
case of death for injury/ occupational
disease.
 No contribution criterion/ widow will get the
benefit for life on monthly basis
 Son/daughter will get the benefit till 18 yrs
 Funeral benefit
 Lump sum payment of Rs 5000/- the family
member
 At a time payment

14. Medical benefit for
retired/ disabled person
 eligible for medical benefit for
self, spouse, dependent, on
retirement
 Min 5 yrs insurable employment
before retirement.
 Rs 120 payment in advance in a
year
 Employees Compensation Act,
1923 & it’s relevance ?

15. Some important
information…
 Several Forms & records to maintain by the employer
 Bar to reduce wages / Sec 72
 Bar to dismiss employees during her/ his sickness
( sec 73)
 Exemption of ESI Act
 Authorized leave to ESI benefit in concurrence /
employer can deduct
 Recovery officer ( sec 45(1) (b)
 Damages & interest can be imposed
 Arrest of employer
 Attachment of properties of the employer
 ESI court ( sec 75)

16. What is ‘ Wages” ?
 All remuneration , if the terms of
contract express or implied
 Period of authorized leave , lock
out/ strike which is not illegal
 Any Back wages
 Additional expenses , if any, paid
at the interval not exceeding 2
months ( defray expenses)

17. Not to be treated as ‘
Wages”
 PF/ pension contribution
 Daily allowances on tour
 Gratuity payment
 Retrenchment compensation in lieu of notice period
 Benefits under ESI act
 Encashment of leave
 Inam
 Washing allowance for livery uniform for servant
 Commissions to dealers/ agents
 Transport operators/ Rickshaw pullers ( amount paid)
OT wages not to be taken into account for coverage but contribution to
be paid to ESI authority
Important point to remember.
 Where the employer does not give break up figure with regard to
purchase of materials / machines , 25% straightway to be taken by
ESI authority as wages & contribution to that has to be paid.

18. Other side of ESI
Services
 Unfriendly panel Doc
 Do not give proper treatment
 Cumbersome procedure
 Medicines not available in most of the times
 Docs are absent
 Equipment in the hospital are not generally
up to date
 Worst sufferers are ‘ occupational disease”
holders
 Poor quality of food stuff in the hospitals
 Finally Corruption to a large extent

19. Some Important Forms/
Registers to maintain by
Employer.
 F/01 – registration for employer’s code
 1A / annual information of the orgn
 F/1 Declaration form, F/6 – register of
employees, F11– accident book to
maintain, F12/ accident report to send,
RCC to send within 42 days from end
of each contribution period, etc etc
THANKS