employee state insurance

7/30/2019 employee state insurance

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ESIC


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The Employees State Insurance Scheme

is an integrated measure of SocialInsurance embodied in the EmployeesState Insurance Act and is designed toaccomplish the task of protecting

employees as defined in the EmployeesState Insurance Act against the hazardsof sickness, maternity, disablement anddeath due to employment injury and toprovide medical care to insured personsand their families.


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Constitution of Corporation

A Chairman and a vice chairman to be appointed by the

Central Government;

one person each representing each of the States inwhich this Act is in force to be appointed by the State

Government concerned;

one person to be appointed by the Central Governmentto represent the Union territories;

Persons representing employers to be appointed by theCentral Government in consultation with suchorganizations of employers as may be recognized for thepurpose by the Central Government;

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Ten persons representing employees to be appointed by theCentral Government in consultation with such organisations of

employees as may be recognised for the purpose by the CentralGovernment;

Two persons representing the medical profession to beappointed by the Central Government in consultation with suchorganizations 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 memberof the Council of States (Rajya Sabha) elected respectively bythe members of the House of the people and the members of the

Council of States; and The Director General of the Corporation, ex officio.


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Act Applicability:

The ESI Act 1948 applies to

Non seasonal Factories using power in andEmploying ten (10) or More persons

Non seasonal and non- power usingfactories and establishments employingtwenty(20) or more persons

Employees of the Factories and

Establishments in receipt of wages notexceeding Rs.10,000 /- Per month arecovered under this Act.


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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 ofRs.40/- or Less, are exempted from Payment of their

share of contribution (w.e.f 8.4.00) but are entitled to allsocial security benefits under the Scheme.

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Employees covered under the ESI Act, are required topay contribution towards the scheme on a monthly basis.

A contribution period means a six month time span from1st 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 threemonths after the closure of a contribution period. Thetwo type of periods are elucidated below.

Contribution Period Benefit Period

1st April to 30th September 1st January to 30th June

of the following year1st October to 31st March 1st July to 31st Dec.


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Benefits of ESICAt A

Glance


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Medical Benefits

The Scheme provides full range of medical care toInsured person and family, through a network of ESIDispensaries & Panel clinics, diagnostic centres and ESIHospitals etc. Super speciality facilities are provided tothe beneficiaries through recognised advanced medical

institutions empanelled for the purpose on referral basis.The Corporation has set up a revolving fund in most ofthe States to ensure smooth flow of funds for super-speciality treatment of ESI beneficiaries.


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Sickness Benefits

Sickness Benefit represents periodical cashpayments made to an IP during the period ofcertified sickness occurring in a benefit periodwhen IP requires medical treatment and

attendance with abstention from work onmedical grounds.


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Maternity Benefits

Maternity benefit consists of periodical cash

payments in case of confinement ormiscarriage or sickness arising out of

pregnancy, confinement, premature birth of

child or miscarriage, to an insured woman ascertified by a duly appointed medical officer

or mid wife.


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Disablement benefit

Disablement benefit is admissible fordisablement caused by employment injury.

At the first instance, temporary disablement

benefit is payable as long as the temporarydisability lasts. If the employment injury

results in partial or total/permanent disability,

permanent disablement benefit is payable tillthe death of the insured person.


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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 diseaseand is equivalent to about 70% of the wages.


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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 ispaid either to the eldest surviving member of

the family or, in his absence, to the person

who actually incurs the expenditure on the

funeral.


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Rehabilitation:

Physical rehabilitation

Insured Persons who suffer physical disablementdue to employment injury are provided artificialappliances or other physical aids such as wheelchairs, crutches, dentures and spectacles etc.


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Vocational Rehabilitation

The Corporation at its cost arranges forthe vocational rehabilitation of disabledinsured persons provided the disabilityhas been assessed at above 40 percent

and the beneficiary is not over 45 yearsof age. The training is provided atvocational rehabilitation centres run by

the Govt. of India etc. The fee chargedor Rs.123/- a day whichever is more,travelling expenses etc are borne bythe Corporation.


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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 topay simple interest at the rate of 15 percent per annum in respectof each day of default or delay in payment contributions. Inaddition, under the Provision of Regulation 31-C of ESI (General)Regulations, 1950, read with sec.85(B)(i) of the ESI Act, theCorporation is empowered to recover damage as under:

Period of delay in Rate of Damagespayment 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 landrevenue Section 45(c) to Section 45(I) by the Recovery Officer ofESI Corporation.


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Obligation of the Employers


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1). Get the Factory / establishment registered with in 15

days after the Act becomes applicable. Submit Form 01to the Regional office for this purpose. ObtainEmployers code No. for use in all ESIC Forms /documents and correspondence with the offices of theESI Corporation.

2). Fill up Declaration Forms in respect of all coverableemployees and submit the same to the Regional Office/Local Office of the corporation well before the AppointedDay and obtain insurance Numbers from the concernedLocal Office/ Regional Office, In respect of newlyappointed employees, fill up the declaration form soon

after appointment of such employees and submit thesame to the Local Office Concerned.


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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 Employers share @ 1.75% of

the wages) with in 21 days of the month

following, in which the wages fall due.


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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.


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Maintain the following records/ registers properly for thepurpose of inspection

1. Attendance Registers / Muster Rolls (in respect of allemployees including those employed throughcontractors)

2. Wage register

3. Cash Book / Bank Book4. Account Books including Ledgers and Vouchers,

Balance Sheet.

5. Employees Register

6. Accident Book

7. Returns of Contribution8. Return of Declaration Forms

9. Copies of Challans

10. Inspection Book


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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 theRegional office / Local Office within seven days of itsclosure or shifting

11. Promptly report change in business activity, ownershipof the concern or its management.

12. Ascertain the liability towards ESI dues, while takingover the ownership of any factory/establishment by

purchase, gift, lease or license or in any other mannerwhatsoever as new owner is liable to discharge the pastliabilities if any.

Date post:	14-Apr-2018
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