The Employees State Insurance
Act,1948
Presented by: Shalu Saraf
CS Trainee

Preliminary

Object of the act:
To provide for certain benefits to
employees in case of sickness, maternity
and injury during employment and to make
provision for certain other matters in
relation thereto.

The employees state insurance act,1948
Applicability of the act:
Under Section 2(12) The Act is applicable to the factories employing 10 (Ten) or
more persons irrespective of whether power is used in the process of
manufacturing or not.
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels,
restaurants, cinemas including preview theatre, road motor transport undertakings
and newspaper establishment employing 20 (Twenty) or more persons.
Further, u/s 1(5) of the Act, the Scheme has been extended to Private Medical
Institution and Educational Institutions employing 20 (Twenty) or more persons in
certain States .
The existing wage-limit for coverage under the Act, is Rs.15,000/- per month
(excluding remuneration for overtime) w. e. f:- May 01, 2010.
** Sec.2(12) :The definition of factory has segregated factories in two categories for coverage. Those running with power
and those without power. Those with power were included even though they employed ten or more persons but those
running without power were included only when they employ twenty or more persons. This distinction has been
removed and all those factories are covered if they employ ten or more persons irrespective whether run with power
or without power.

The employees state insurance act,1948
Applicability of the act:
AREAS COVERED
The ESI Act is applicable across the length and breadth of the India.
STATES
All the States except Manipur, Sikkim, Arunachal Pradesh and Mizoram.
UNION TERRITORIES
Delhi and Chandigarh

The employees state insurance act, 1948
Act does not apply to:

Seasonal factories engaged exclusively in any of the activities like:
cotton ginning, cotton or jute pressing, decoration of ground nuts,
manufacturing coffee, indigo, lac, rubber, sugar, or tea or any
manufacturing process incidental to or connected with any of the
afore said activities, and including factories engaged for a period not
exceeding seven months in a year in blending, packing or
repackaging tea or coffee, or in such other processes as may be
specified by the central govt.

The factories exempted as seasonal from the provisions of the
act.
** Sec.2(9) The definition of employee excluded apprentices appointed under standing orders also besides the
apprentices appointed under the Apprentices Act 1961 The definition of employee now includes apprentices
appointed under standing orders but excludes only the apprentices appointed under the Apprentices Act 1961.

The employees state insurance act, 1948
Act does not apply to:

Mines

Railway running sheds

Govt. factories or establishments and Indian naval,
military, or air force

Other Govt. notified exempted establishments

The employees state insurance act, 1948
ACT AUTHORISATION

1. To Promote and measure for health and
welfare of INSURED EMPLOYEES (IE)

2. Intervene for the rehabilitation and reemployment for disabled / injured

3. To appoint inspectors for purposed of the act

4. To determine the amount of contribution and
relevant verification

The employees state insurance act, 1948
Employees state insurance corporation

Sec. 3 of this act provides for the establishment of ESIC by the central
govt. for administration of the ESIS according to the provision of this act.
Such corporation shall be the body corporate having perpetual succession
and a common seal and can sue or be sued by on the said name.

Constitution:- sec.(4)
The Central govt. appoints a chairman, vice chairman, and other members
of interest of employees, employers, state govt./union territories, medical
profession. 3 members of parliament and director general of corporation
are its ex- officio members.

The employees state insurance act, 1948
Employees state insurance corporation

POWERS AND DUTIES:Sec. (19) empowers to promote measures for improvement of the health
and welfare of the insured person and rehabilitation and re- employment of
insured person who have been disabled or injured and incur in respect of
such measure expenditure from the fund of the corporation within such
limits as may be prescribed.
sec.(29) empowers:- (a) to acquire and hold property both movable and
immovable, sell or otherwise transfer the said property; (b) it can invest and
re-invest moneys which are not immediately required for expenses and/or
realize such investment; (c) it can raise loan and discharge such loan with
the previous section of the central govt.; (d) it may constitute for the
benefits of its staff or any class of them such provident or other benefit fund
as it may think fit. However power u/s 29 can be exercised subject to such
conditions as may be prescribed by the central govt.

The employees state insurance act, 1948
Employees state insurance corporation

WINGS OF ESIC:
1.
STANDING COMMITTEE
2.
MEDICAL BENEFITS COUNCIL

The employees state insurance act, 1948
Standing committee

Constitution: (sec. 8)
This is the committee of ESIC. It shall be constituted among its members,
consisting of;
a) A Chairman appointed by the central govt.
b) 3 members of the ESIC appointed by the central govt.
bb) 3 members of the corporation representing such 3 state govt. thereon as the
central govt. may, by notification in the official gazette, specify from time to
time.
c) 8 members elected by the corporation:- 3 members from among the members of ESIC representing the employers;
- 3 members from among the members of ESIC representing the employees;
- 1 member from among the members of ESIC representing the medical professional;
- 1 member from among the members of ESIC elected by parliament
d) The director general of ESIC, ex- officio.

The employees state insurance act, 1948
Standing committee
Empowered to:
1. Shall administer the affair of the corporation

2. Shall submit the consideration and decision of
the corporations

3. Have discretion on other issues of corporation

the employees state insurance act, 1948
Medical Benefit Council
Duties :- sec. (22)

1. Advise to administration on Medical Benefit, purpose
of grants and related matter

2. Have power and duties of INVESTIGATION as may
be prescribed in relation to complaint against Medical
practitioner, its treatment and attendance

3. Perform other duties

The employees state insurance act, 1948
Inspectors- Duties- Powers
Duties  1. Inquiring into the correctness in any return of contribution
 2. Ascertaining Provision of the Act has been complied
 3. Other authorized / specified duties by the corporation.
Powers  1. To collect require and relevant information of employer / contractor or both
 2. To enter org / contractor premises at reasonable time and examined
relevant account books and relevant documents, payment of wages etc.
 3. To examine employer, contractor, his agent / servant or IE in factory /
office
 4. To make copies of extracts from any registrar, account books and other
books of maintenance of org.
** Sec. 45 : It provides for appointment of Inspectors for implementing the provisions of the Act Now
these Inspectors are called Social Security Officers.

The employees state insurance act, 1948
Employer/ Employee’s Contribution

It is the principle employer’s responsibility to deposit his
own as well as employee’s contribution in respect of all
employees including the contract labor, into the E.S.I.
Account. Non-availability of funds cannot be a ground for
non-payment of contributions under the act. There is no
provision to waive the contribution, damages and interest.

The employer is required to contribute at the rate of 4.75%
of the wages paid/ payable in respect of every wage period.
The employees are also required to contribute at the rate of
1.75% of their wages except when the “average daily wages
in a wage period” are equal to or less than Rs.100/-.

The employees state insurance act, 1948
Employer/ Employee’s Contribution

The employer should get his factory or
establishments registered with the E.S.I.
Corporation within 15 days after the Act becoming
applicable to it, and obtain the employer’s Code
Number. The regional officer will allot a code
number to the employer, which must be quoted in
all documents and correspondence.

The employees state insurance act, 1948
Contribution Deposit & Due Date:
The amount of contribution (Employee‟s and Employer‟s share) is to be
deposited with the authorized bank (State Bank Of India) through Online
Generated Challan, on or before 21st day of the Succeeding month, of
month following the calendar month.
If the employee is drawing up to Rs.100/- as daily average wage, he is
exempt from the payment of his share of contribution. The employer is
however to pay employer's share of 4.75% of the salary received by the
employee.
The State Govt. bears one-eight share of expenditure on medical benefits
with in the per capita ceiling of Rs.1500/- per I.P. family per annum & all
additional
expenditure
beyond
the
ceiling.

The employees state insurance act, 1948
Contribution Deposit & Due Date:

There are two contribution periods each of six months duration and two
corresponding benefit periods also of six months duration as under.

Contribution period Corresponding Cash Benefit period:-
Contribution Period
Cash Benefit Period
1st April to 30th Sept.
1st Jan of the following year to 30th
June
1st Oct to 31st March of the year 1st July to 31st December.
following.

The employees state insurance act, 1948
Benefits available to insured employee

The purpose of the Employee State Insurance Act is to
provide benefits as detailed in the Act particularly in section
46, to the insured persons or their dependants.

The following benefits are provided under section 46:Sickness benefit
Maternity benefit
Disablement benefit
Dependents benefit
Medical benefit
Funeral expenses
1.
2.
3.
4.
5.
6.

The employees state insurance act, 1948
Sickness benefit

Every insured employee is entitled to the cash benefit for the period
of sickness certified by a duly appointed medical practitioner if the
contributions in respect of him were payable for not less than 78 days
in the corresponding contribution period (i.e. 6 months).

Cash benefit takes the form of periodical payment made to an insured
person which is payable for maximum numbers of 91 days in any two
consecutive benefit periods. The benefit is not paid for the first two
days of sickness which is treated as the waiting period.

Insured persons suffering from long term diseases like T.B., leprosy,
mental, heart etc. and who have been continuous employment for two
years are entitled to get sickness benefit period up to 309 days.

The employees state insurance act, 1948
Sickness benefit

Claim form under ESI Act:- Form - 09
Extended Sickness Benefit:
Extended Sickness Benefit is a Cash Benefit paid for prolonged illness due
to any of the 34 specified diseases as per (Annexure – A).
Eligibility for SB:- To be entitled to the Extended Sickness Benefit an Insured
Persons should have been in continuous employment for 2 years or more at the
beginning of a spell of sickness in which the disease is diagnosed and should also
satisfy other contributory conditions.
Maximum Duration of ESB:- ESB shall be payable for a period of 124 days
initially and may be extended up to 309 days in chronic suitable cases by Regional
Dy. Medical Commissioner/Medical Referee/Administrative Medical Officer/Chief
Executive of the E.S.I. Scheme in the State or his nominee on the report of the
specialist(s).

The employees state insurance act, 1948
Sickness benefit
Enhanced Sickness Benefit:
Enhanced Sickness Benefit equal to full wage is payable to insured
persons undergoing sterilization for 7 days/14 days for male and
female workers respectively.

The employees state insurance act, 1948
Maternity benefit

A periodical cash benefit is payable to an insured woman
employee, in cash of confinement, miscarriage, medical
termination of pregnancy, premature birth of a child or
sickness arising from pregnancy etc.

Eligibility for MB:The contribution condition is the same as for Sickness
Benefit. The daily benefit rate is double the Sickness
Benefit rate and is thus roughly equivalent to the full
wages. Benefit is paid for Sundays also.

The employees state insurance act, 1948
Maternity benefit
The Benefit is paid as follows:(a)
For Child Delivery:- For a total period of 12 weeks beginning not more than
6 weeks before the expected date of child birth. (form 21& 23)
(b) For Miscarriage:- payable for 6 weeks from the date following miscarriage (Form
20 & 23)
(c) For Sickness arising out of pregnancy, confinement, premature birth of child
or miscarriage:- For an additional period of up to 04 weeks. (form 8, 9, &10)
Medical Bonus:Medical Bonus is lump sum payment made to an insured woman or the wife of
an insured person in case she does not avail medical facility from an ESI
hospital at the time of delivery. The amount of Bonus is Rs. 5000/-.

The employees state insurance act, 1948
Disablement benefit

It is payable to an employee who is injured in the course of
his employment and is permanently or temporarily disabled
or contacts any occupational disease.

Temporary disablement:1) A person who sustains temporary disablement for not less than
3days(excluding the day of accident) shall be entitled to periodical
payment as may be prescribed by the central govt.
2) From day one of entering insurable employment & irrespective of
having paid any contribution in case of employment injury.
Temporary Disablement Benefit at the rate of 90% of wage is
payable so long as disability continues.

The employees state insurance act, 1948
Disablement benefit




Permanent disablement:the benefit is paid at the rate of 90% of wage in the form of monthly
payment depending upon the extent of loss of earning capacity as
certified by a Medical Board.
the daily benefit rate for commutation from Rs. 5 to Rs. l0 and the
maximum commuted value of Rs. 30000 to Rs. 60000/- at the time
of commencement of final award of permanent disability.
Claim form under ESI Act:For Temp. Disablement:- Form – 09
For Per. Disablement:- Form – 14

The employees state insurance act, 1948
Dependents benefit

Dependents 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 90% of the wages.

Eligible Members:
A widow can receive this benefit on a monthly basis for life or till her remarriage.
A son or daughter can receive this benefit till twenty five years of age.
Other dependants like parents including a widowed mother etc. can also
receive this benefit under certain conditions.
The first installment is payable within a maximum of three months
following the death of an insured person and therefore, on a regular
monthly basis.

The employees state insurance act, 1948
Dependents benefit

Claim form under ESI Act:- Form – 15 & 16
** Sec.2(6-A) :
The definition of dependant included only a minor legitimate or adopted son.
However, the scope of the definition has been widened to include legitimate or adopted
son who has not attained the age of twenty five years.
** Sec.2(11) :
The definition of family included only those parents who are dependant of the
insured person. it excluded a minor brother or sister even though they were wholly
dependent up on the earnings of the insured person. The definition of family now
includes also those parents who have some source of income subject to a limit
prescribed by the Central government as well as a minor brother or sister if their
parents are not alive and the insured person is not married and they are wholly
dependent up on the earnings of the insured person.

The employees state insurance act, 1948
Medical benefit

The ESI Scheme provides full range of Medical Care to all Insured person and their
family, through a network of ESI Dispensaries, Hospitals & Panel clinics, Diagnostic
centers & Super Specialty.

Super- Specialty treatment such as:- Open Heart Surgery, Neuro Surgery, Bone
Marrow Transplant, Kidney Transplant or specialized investigations like CAT scan,
MRI, Angiography etc.

Eligibility for MB:- An employee who is covered under the Scheme for the first time
is eligible for medical care for a period of three months. If employee contributes at
least for 78 days in a contribution period the eligibility is there up to the end of the
corresponding benefit period.

Claim form under ESI Act:- Form - 09

The employees state insurance act, 1948
Funeral Expenses

Funeral expenses are in the nature of a lump sum payment unto a maximum of Rs.
10,000/- (revised w.e.f :- May 2010) 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.

Claim form under ESI Act:- Form – 22
Others Benefits:1. Rehabilitation Allowance:- Rehabilitation in case of disabled insured persons under 45 years
of age with 40 percent or more disablement.
2. Free Supply:- Free Supply of physical aids and appliances such as crutches, wheelchairs,
dentures, spectacles and other such physical aids.
3. Old Age Medical Care:- Old age Medical care for self and spouse at a nominal contribution of
Rs. 120/- per annum.
4. Rajiv Gandhi Shramik Kalyan Yojana:- Unemployment Allowance is payable to those workers
facing involuntary unemployment due to closure of factory or non-employment injury. Benefit rate
which is just above 50% of the daily wages for max 01 year.

** Rule 59 : Existing limit of funeral expenses is Rs. 5000/- Revised to Rs.10000/-

The employees state insurance act, 1948
Adjudication of dispute & claims

The employees state insurance act, 1948
Adjudication of dispute & claims






Employees Insurance Court
Institutions of proceedings, etc.
Powers of employees‟ Insurance Court
Reference to High Court
Appeal
Stay of payment during pending of appeal

The employees state insurance act, 1948
Offences and penalties

Punishment for false statement:- In this case any false
statement or false representation, shall be punishable with
imprisonment or fine up to Rs.2000 or with both

Punishment for failure to pay contributions:- if any person
fails to pay any contribution which under to this act he is
liable to pay, he shall be punishable with imprisonment up to
three years.

Punishment for other contravention:- in contraventions like
dismisses, discharges, reduces or otherwise punishes an
employee, shall be punishable with imprisonment up to one
year or with fine up to Rs.4000 or with both

The employees state insurance act, 1948
Offences and penalties

Power to recover damages:- If employer fails to pay the
amount of contribution then corporation may recover from the
employer by way of penalty.

Power of court to make orders:- If court makes order for
employer- if employer is not able to make this order within
period then employer shall be punishable with imprisonment
in respect thereof U/S.85 and shall also be liable to pay fine
up to Rs.1000 for everyday.

The employees state insurance act, 1948
Miscellaneous Provisions
Exemption of a factory or establishment:- (sec.87)





Exemption may be granted to any factory or establishment for
maximum period of one year.
Any exemption granted shall be notified by the notification in the
Official Gazette.
The appropriate Govt. while granting exemption can improve any
terms and conditions upon the factory/establishment.
If required any exemption can be renewed for max. one year
Before granting any exemption Corp. must be given opportunity to
make representation which has to be considered by the Govt.

Exemption of persons or class of
persons (sec.88)




App. Govt. is authorized to exempt any person or class of
person from the operation of the act
Any exemption granted shall be notified by the notification in the
Official Gazette.
Such person or class of persons must be working in a
factory/establishment
Any exemption granted shall be accompanied with such conditions
as the appropriate Govt. may think fit to impose

Exemption of a factory or establishment
belonging to Govt./any local authority




App.Govt. must consult the Corporation
Any exemption granted shall be notified by the notification in the
Official Gazette.
Exemptions shall always be subj. to the conditions imposed by the
Govt.
Exemptions shall always be in order only if the employees in any
such factory/establishment are already in receipt of benefits
substantially similar or superior to the benefits provided under this
act.

Exemption from one or more provisions of the
act (sec.91)



Exemption may be granted to any factory or establishment or
any person or class of person by App.Govt.
Any exemption granted shall be notified by the notification in the
Official Gazette.
Any exemption granted under the sec.87,88,90 or 91 in respect of
any person or class of person may be enforced either prospectively
or retrospectively the date of its enforcement has to be specified
(sec.91-A)

The employees state insurance act, 1948
Obligation of the Employers …
1). Get your 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.

The employees state insurance act, 1948
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.
5).Maintain an Accident Book as prescribed under
the Factory Act / ESI Act.

The employees state insurance act, 1948
Obligation of the Employers …
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.

Forms for employer
Form
Description
Form 01
Employer's Registration Form
Form- 01A
Annual information of factory/estt.
submission form
Form 3
Return of Declaration forms
Form 5
Return of contributions
Form 5a
Statement of advance payment of
contributions
Form 6
Register of employees
Form 10
Abstention verification
Form 11
Accident Register
ESIC 37
Certificate of Re-employment /
continuing employment
Attachment

Forms for employees
Form
Description
Form 1
Declaration Form
Form 2
Addition / Deletion in Family
declaration form
Form 9
Claim form for sickness /TDB/
Maternity
Form 14
Claim form for Permanent
disablement benefit (PDB)
Form 15
Claim form for Dependant Benefit
(DB)
Form 16
Claim form for periodical payments
of DB
Form 19
Claim for Maternity benefit
Attachment

Forms for employees
Form
Description
Form 20
Claim form for Maternity benefit after
death of child
Form 22
Claim form for Funeral Expenses
Form 23
Life certificate
Form 24
Dependant benefits declaration
Form for reimbursement of medical
expenses
ESIC 37
Certificate of Re-employment / continuing
employment
Attachment

Any queries…

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