DEFINITIONS:

 

 

1. "Dependant" means any of the following relatives of a deceased insured person, namely:-

a.       A widow, a minor legitimate or adopted son, an unmarried legitimate and adopted

b.       A widowed mother

c.        If wholly dependent on the earnings of the insured person at the time of his death, a legitimate or adopted son or daughter who has attained the age of eighteen years and is infirm

d.       If wholly or in part dependent on the earnings of the insured person at the time of his death

                                                              i.      A parent other than a widowed mother

                                                             ii.      A minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or adopted or illegitimate if married and a minor or if widowed and a minor

                                                           iii.      A minor brother or an unmarried sister or a widowed sister if a minor

                                                          iv.      A widowed daughter-in-law

                                                           v.      A minor child of a pre-deceased son

                                                          vi.      A minor child of a pre-deceased daughter where no parent of the child is alive, or

                                                        vii.      A paternal grand-parent if no parent of the insured person is alive

 

2. "Permanent Partial Disablement" means such disablement of a permanent nature, as reduces the earning capacity of an employee in every employment which he was capable of undertaking at the time of the accident resulting in the disablement

 

Provided that every injury specified in Part II of the Second Schedule shall be deemed to result in permanent partial disablement

 

3. "Permanent total Disablement" means such disablement of a permanent nature as incapacitates an employee for all work which he was capable of performing at the time of the accident resulting in such disablement

 

Provided that permanent total disablement shall be deemed to result from every injury specified in Part I of the Second Schedule or from any combination of injuries specified in

 

Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries, amounts to one hundred per cent. Or more

 

 

4. "Sickness" means a condition which requires medical treatment and attendance and necessitates abstention from work on medical grounds

 

5. "Temporary Disablement" means a condition resulting from an employment injury which requires medical treatment and renders an employee, as a result of such injury, temporarily incapable of [doing the work which he was doing prior to or at the time of the injury]
6. "Wages" means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes

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BENEFITS & CONTRIBUTORY CONDITIONS

 

 

Sickness benefit:

 

Benefit	contributory conditions	Duration	Rate
Sickness (for self)	Payment for at least 78 days in the relevant contribution period	91 days in any two consecutive benefit periods.	Standard benefit rate (not less them 50% of wage)
Extended sickness benefit (for self) (For 34 specified long term diseases)	2 Years continuous employment and payment of contribution for at least 156 days in four-contribution period.	309 days duration has been extended beyond 400 day (91 days S.B. plus 309 days E.S.B.) to two years in deserving cases.	140% of the standard benefit rate (but not less than 70% of the wage)
Enhanced sickness benefit (for undergoing sterilization)	Payment for at least 78 days in the relevant contribution period	7 Days vasectomy and 14 days for tubectomy.	Twice the standard benefit rate but not less than full wages.

 

Disablement benefits (employment injury or occupational disease):

 

Benefit	contributory conditions	Duration	Rate
Temporary Disablement benefit	No condition	Till the incapacity lasts	140% of the standard benefit rate.
Permanent Disablement benefit	No condition	For life	up to 140% of the standard sickness benefit rate.

 

Dependents' benefit:

 

Benefit	contributory conditions	Duration	Rate
For death due to employment injury or occupational disease (for dependants)	No Condition	To immediate dependants	140% of the standard benefit rate.

 

 

 

Maternity benefit:

 

Benefit	contributory conditions	Duration	Rate
Maternity benefit (for self)	Payment of contribution for 70 days in immediately preceding two consecutive contribution periods.	12 weeks of which not more than SIX can precede the expected date of confinement, 6 weeks for miscarriage.	Double the Standard benefit rate (Not less than full wage)

 

Medical benefit:

 

Benefit	contributory conditions	Duration	Rate
Medical benefit (for self & family)	No condition	12 weeks of which not more than SIX can precede the expected date of confinement, 6 weeks for miscarriage.	Double the Standard benefit rate (Not less than full wage)

 

Other benefits:

 

Benefit	contributory conditions	Duration	Rate
Funeral Expenses	No condition		Actual expenditure on funeral not exceeding Rs. 2500\-
Rehabilitation Allowance	No condition	For each day on which insured person remains admitted in artificial limb center for fixation/repair or replacement of artificial limb	Double the standard sickness benefit rate but not less than full wages.
Vocational & Rehabilitation	Insurable employment up to 40% permanent disablement and below 45 yrs of age.	Till such training lasts at a recognized center/ institute.
Medical benefit to retired and disabled insured persons	On payment @ of Rs.10 per month in lump-sum for one year in advance	Period for which contribution is paid	Full medical care for self and spouse only
Medical Bonus	No condition other than insurable employment of Self/spouse	Rs 1000/- is paid as a lump-sum grant towards confinement expenses to an insured women, wife of insured person (w.e.f. 1-4-03)	At places where necessary medical facilities are not available under the ESI Scheme.

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Employee State Insurance Scheme

Employee State Insurance Scheme

 

The ESI Act 1948 in the first instance, applies to non seasonal factories using power in the manufacturing process and employing 10 or more persons and non-power using factories or establishments employing 20 or more persons for wages. The provisions of the act are being implemented area wise by stages.

 

The act contains an enabling provision under which the "Appropriate Government" is empowered to extend the provisions of the Act to other classes of establishments-industrial, commercial, agricultural or otherwise. Under these provisions most of the state governments have extended the provisions of the ESI act to the following classes of establishments.

 

1. Shops, hotels, restaurants, cinemas including preview theaters, road motor transport agencies and news paper establishments, etc employing 20 or more employees.
2. Power using Beedi manufacturing process and employing 10 or more employees attract coverage under the act. A few states have even extended the provisions of the Act to non-power using Beedi manufacturing units employing less than ten persons.
3. Slate pencil manufacturing units employing one or more employees have also been brought under the coverage of the Act in a few States.

 

The scheme has so far been implemented in 26 states and union territories; the only exceptions being a few smaller states in the north eastern region of the country.

 

REGISTRATION OF FACTORY ESTABLISHMENT:

 

Registration of a factory / establishment with the Employees' State Insurance Corporation is a statutory responsibility of the employer under Section 2-A of the Act read with regulation 10-B. The employer, in respect of a factory/ establishment to which the Act applies for the first time, is liable to furnish to the appropriate regional office within 15 days after the Act becomes Applicable, a declaration of registration in Form 01 (Employers registration form). This is obligatory on the part of the Employer. In addition to this, the employer will have to indicate, in a separate sheet, the name and address of the factory/ establishment, number of employees, nature of duty and name, designation and address of the Manager, controlling such persons in respect of any other office(s) situated outside the premises of the Factory/ Establishment.

 

CODE NUMBER:

 

a)   On receipt of the Employer's Registration Form (Form 01) and Survey report submitted by the Insurance Inspector, the Regional Office examines the coverage and if it is satisfied that the Act applies to the factory/establishment, will allot a code number to the employer. Only one code number is allotted to a factory/establishment even though functionally it may have more than one unit/subunit within the same premises/precinct/station.

 

The code number so allotted is required to be indicated by the employer in all his correspondence with the corporation, Regional Office and Local Office.

 

SUB-CODE NUMBER:

 

b)  There may be a case where an employer is having the main factory/establishment at one station and sub-unit, branch office or registered office at another implemented station, either within the same state or outside the state. In all such cases, Principal employer is required to furnish necessary details to the Regional Director concerned for allotment of sub-code number to each sub unit.

 

Return of contribution is required to be submitted separately for the main Code number and each Sub-Code number. Though the employer has the option to make compliance in respect of field offices, it is in the interest of the employer to make compliance in respect of the sub unit, independent of the compliance being made in respect of the main unit. The employees working in the branch office can draw/claim benefit locally from the nearby Local Office with which the branch office are attached. Similarly, it would be convenient for the workers to avail medical benefit from the nearby ESI dispensary in that state.

 

COVERAGE OF EMPLOYEES:

 

The term 'Employee' as defined in section 2(9) of the ESI Act, means any person employed for wages in connection with the work of a factory or an establishment to which the act applies. The term employee includes all those persons employed in clerical, manual, skilled, and semi-skilled supervisory

 

WAGE CEILING FOR COVEREGE:

 

The wage limit for coverage under this act is not exceeding Rs. 10,000/-P.M. per month (w e f 1^st Oct 06).

 

An employee who is coverable at the beginning of a contribution period shall continue to remain covered till the end of that contribution period notwithstanding the fact that his wages may exceed the prescribed wage ceiling at any time after the commencement of that contribution period.

 

 

RATES OF THE CONTRIBUTION:

 

The rates of the contribution were last revised by the Corporation from 1^st January 1997 and are still in vogue. These rates of contribution are:-

 

• Employees' Contribution         –        1.75 percent of the wages
• Employers' Contribution          –        4.75 percent of the wages

Total                  –        6.50 percent of the wages

 

Employees in the receipt of an average daily wage of Rs. 40/- or less, are exempted from payment of the share of contribution (w.e.f. 8.4.2000) but are entitled to all social security benefits under the scheme.

 

ADVATAGES TO EMPLOYERS:

 

Employers, who come under the purview of the ESI Act- 1948, derive the following benefits from the scheme:-

 

1. Employers are absolved of all their liabilities of providing medical facilities to employees and their dependents in kind or in the form of fixed cash allowance, reimbursement of actual expenses, lump sum grant or opting for any other medical insurance policy of limited scope unless it is a contractual obligation of the employer.

 

2. Employers are exempted from the applicability of the:
1. Maternity Benefit Act,
2. Workmens' compensation Act in respect of employees covered under the ESI scheme

 

3. Employers have at their disposal, a productive, well secured workforce; an essential ingredient for better productivity.

 

4. Employers are absolved of any responsibility in times of physical distress of workers such as sickness, employment injury or physical disablement resulting lass in wages, as the responsibility of paying cash benefits shits to the Corporation in respect of insured employees.

 

5. Any sum paid by way of contribution under the ESI Act is deducted in computing 'income' under the Income Tax Act.

 

BENEFITS TO EMPLOYEES:

 

Under the ESI Scheme, the comprehensive and need based package of major Social Security benefits in cash and kind include:

 

1. Medical benefit                              -        for self & family
2. Sickness benefit                             -        for self
3. Maternity benefit                            -        for self
4. Disablement benefit     

a) Temporary Disablement benefit    -     for self

b) Permanent Disablement benefit    -     for self

5. Dependants' Benefit                       -        for dependants in case of death due to employment injury.

In addition, the scheme also provides some other need based benefits to insured workers. These are;

a) Funeral expenses                       -          to a person who performs the last rites of an I.P.

b) Rehabilitation allowance              -     for self

 

 

c)  Vocational Rehabilitation             -     for self

d) Old age Medicare                        -     for self and spouse

e) Medical bonus                             -     for insured women and IP's wife

 

An interesting feature of the ESI scheme is that the contributions are related to the paying capacity as a fixed percentage of the employees' wages, whereas, Social Security benefits are provided according to entitlement without any distinction of class or status. Medical benefit for self and dependants is provided at uniform scale from day one of entering insurable employment.

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