Information on ESIC


The Employees State Insurance Act, 1948

The ESI Act has been passed to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provisions for related matters. As the name suggests, it is basically an ‘insurance’ scheme i.e. employee gets benefits if he is sick or disabled.

ESIC:-

Employees State Insurance Corporation (ESIC) has been formed to supervise the scheme under section 3 of the Act. The corporation supervises and controls the ESI scheme.

Applicability of ESI Scheme:-

The scheme is applicable to all factories [Section 1(4)]. The Appropriate Government can also make it applicable to any other industrial, commercial, agricultural or other establishments, by issuing notification and giving 6 month notice. [Section 1(5)].

ESI Act can be made applicable to ‘shops’ also. However, since Government has to provide for hospitals and medical facilities, the Act can be made applicable to different parts of state at different dates.

Thus, if a factory is at a place where ESIC is unable to provide medical facilities, ESI Act may not be made applicable to the area.

Government can exempt a factory or establishment or persons or class of persons from provisions of ESI Act, if the employees are getting better medical facilities [e.g. if Government is convinced that the factory itself is providing very good medical facilities e.g. like TISCO].



Regional Offices/Branch Offices get covered:-

Regional offices of a factory, which have their connection to the factory and where the Principal Employer has control over the regional offices, the regional offices will be covered under ESIC

If head office is covered under ESIC, branch offices are also covered when branch and principal office are inter-dependent and there is unity of relationship.


Outside agencies can be covered:-

Workers were given work of making ‘bidis’ as home. Right of rejection of rejection of bidis was with employer. It was held that test of control and supervisions lies in the right of rejection.

It was held that employees working outside can be covered under ESIC, if there is master servant relationship.


Definition of ‘Factory’ as per ESI Act:-

The ‘Factory’ means any premises where manufacturing process is carried out. If manufacture is without aid of power, the Act is applicable if persons employed are at least 20. If manufacture is with aid of power the Act applies if persons employed are at least 10. [Section 2(12)].

However, ‘mines’ have been excluded. ‘Manufacturing processes has same meaning as defied under Factories Act [Section 2(14AA)].

One a factory or establishment is covered, it continues to be covered even if number of employees reduce [Section 1(6)].


Construction workers not covered:-

Construction workers employed in construction activities are not covered under ESIC. ESIC circular no. P-12(11)-11/27/99 ins. IV dated 14-6-1999.

However, if administrative office employs 20 or more eligible employees, that establishment and employees working in administrative office will be covered.


Employer under ESIC Act:-

‘Principal Employer’ means owner or occupier of factory, head of department in case of Government department and person responsible for supervision and control, in case of any other establishment [Section 2(17)].

Employees working though contractor are also covered.

‘Contractor’ is termed as ‘Immediate Employer’. It means a person who has undertaken the execution, on the premises of factory or establishment to which this Act applies.

He may do on his own or under the supervision of Principal Employer. The work should be part of work of factory or establishment [Section 2(13)].

Primary liability of ESI contribution is of Principal employer [Section 40(1)].

He can recover the contribution paid by him from the ‘immediate employer’ i.e. contractor [Section 41].


Employee under ESI Act:-

Employee’ means any person employed for wages in or in connection with work of a factory or establishment to which the ESI Act applies. Employees drawing wages up to Rs. 15,000 per month can be presently covered under the ESI Act scheme [Section 2(9)].

Employees include persons employed through contractor, apprentices other than those covered under ‘Apprentices Act’, persons employed in administration office, department of branch for purchase or sale of products.

Casual workers engaged in work incidental to or connected with work offactory of establishment.

Employees working at head office when factory is located at different place, canteen staffs watch and ward staff are employees.

Staffs in hospital attached to factory are employees, members of Indian Naval, Military or Air Forces are excluded.

If an employee is drawing wages less than Rs. 15,000 per month at the beginning of his ‘contribution period’, his contributions are payable for whole period of contribution period of six months even if in between his wages go above Rs. 15,000 P.M. [Proviso to section 2(9)].


Following are not employees:-

Persons drawing wages over Rs. 15,000 per month, member of Army, Navy of Air Force.

Partners of firm are not employees even if they are drawing wages, persons employed in government establishments.

Construction workers engaged in raising additional building subsequent to initial set up of factory.


Contribution to ESIC Fund:-

Both employee and employer have to make contribution to ESIC. The employer has to deduct contribution from wages of employee and pay to ESIC both the employer’s contribution as well as employee’s contribution [Section 39(1)].

The contribution is payable for ‘wage period’ i.e. the period in respect of which wages are payable to employee [Section 39(2)]. Normally, ‘wage period’ is a month.

The Employee’s contribution is 1.75% of wages. It should be rounded off to next 1 Rupee. Employees contribution is not payable when daily wages are below Rs. 15/-.

Employer contribution is 4.75% of total wage bill of all employees in respect of every wage period. Thus, it is not necessary to calculate employer’s contribution separately for each employee.

4.75% of gross wages should be calculated and rounded off to next 1 Rupee. Employees drawing wages lower than Rs. 25 per day do not have to pay employee’s share.

The contribution has to be paid within 21 days from close of the month. It is payable by a challan in authorized bank.

If the contribution is not paid in time, interest @12% is payable [Section 39(5) (a)].

In addition, ESIC authorities can impose ‘damages’ varying 5% to 25% of arrears of contribution u/s 85B.

Employer cannot deduct employer’s contribution from the salary of employee [Section 40(3)].


Liability of principal employer:-
In case of employees of contractor, liability is of principal employer.


Wage for purpose of ESI Act:-

‘Wages’ means all remuneration paid of payable in cash to employee according to terms of contract of employment and includes any payment made to an employee in respect of period of authorized leave, lock-out, lay-off, strike which is not illegal and other additional remuneration paid at interval not exceeding two months.

It does not include contribution paid by employer to any pension fund or provident fund, traveling allowance, reimbursement of expenses made by nature of employment of the employee.

Thus, wages include basic pay, dearness allowance, city compensatory allowance, payment of day of rest, overtime wages, house rent allowance, incentive allowance, attendance bonus, meal allowance and incentive bonus. However, wages do no include annual bonus, unilateral rewards scheme (inam), ex gratia payments made every quarter or every year traveling allowance, retrenchment compensation, encashment of leave and gratuity.


Contribution period and Benefit period:-

Contribution period is (a) 1st April to 30th September (first half) & (b) 1st October till 31st March.

The corresponding benefit period is (a) following 1st July to 31st December (b) following 1st January to 30th June.

Thus, ‘Benefit period’ starts three months after the ‘contribution period’ are over.

The relevance of this definition is that sickness benefit and maternity benefit is available only during ‘benefit period’.

Thus and employee gets these benefits only after 9 months after joining employment and paying contribution. However, other benefits are available during contribution period also.

An employee is entitled to get benefits which are medical benefits as well as cash benefits. He also can get disablement benefit.


ESI Excess Paid adjusted:-

For adjusting excess/short payment.

If the mistake is before the contribution period ends the amount can be adjusted. I.e. in case the contribution period is 1st April – 30th of September, 1st of October – 31st of March.

e.g.:-

In case, adjustment can be made in the succeeding month before the half yearly returns are to be submitted (i.e.) the months fall in between the contribution period 1/4/06 – 30/9/06, wherein the returns are to be submitted only after the payment of September 06 is made. So you have the option of reversing this payment in the month of august 06 or September 06.

The difference needed to be highlighted in the contribution register that is maintained every month.


ESIC Resignation related Enquires:-

Whenever you are filling the half yearly returns you will automatically show the authorities that the employee has left the organization on a particular date.

Half yearly returns are for the period 1st April to 30th September (first half) & from 1st October till 31 March.

The forms will have to be submitted in quadruplicate to the local ESI office with a challan of the monthly returns which you will be having in your records.

In half year return “Return of Contribution” Form no.6, there is a column no.7A which state that “Whether still continues working & drawing wages within the insurable wage ceiling” under this column you have to mention “No”.

Under column no. 8 of Form no.6 under “Remarks” you are required to declare the “Date of Leaving” of the employee.

This information as declared by employer in Form 6 with respect to of leaving insurable employment by an employee will be forwarded by Local ESIC office to concerned ESI dispensary for necessary updates.


For obtaining the Employer’s code you are required to submit the following information with respective office (Regional Director ESI):

Form No.01
List of employees along with their salaries
Registration under Shop & Commercial Establishment Act.
Memorandum & article of association.
Certificate of Incorporation under the companies Act.
List of Directors.
Bank account details of your company (CC account number)
Pan Number issued to your company by Income Tax Authorities.


Contribution Rate

The percentage of contributions made to the ESIC authorities are as under:

By the eligible employees 1.75% of Gross wages

By the employer 4.75% of Gross wages including administrative charges

Thus company will bear an additional burden of 4.75% to comply with the ESIC monthly on the gross wages.

Employees covered under the scheme are persons whose monthly gross salary is of less then Rs.15,000.

[ Before the 1.10.2006 all employees whose wages dose not exceeds Rs. 7,500 per month become coverable under the ESI Act, 1948 ]

[w.e.f 01.10.2006 wages ceiling Rs. 10,000 per month would become coverable under the ESI Act, 1948]

[All employees whose wages dose not exceeds wages (ceiling w.e.f 01.04.2010) Rs. 15,000 per month would become coverable under the ESI Act, 1948.]

The above amount is to be deposited in challan form prescribed under the act.

A half yearly return on Form 6 is to be submitted with local ESI office.

Declaration forms are to be submitted with local office of ESI within 10 days of new joining.

Before doing all this for ESI applicability please check with the local ESI office whether the ESI scheme is applicable in your area or not because this is a scheme which applicable on areas notified by ESI authorities.

As per ESI Act, it applies even to Domestic Servants, which includes casuals, contractual, but excludes Apprentices appointed under Trade Apprentice Act.

When if a person appointed as trainee, he should be paid stipend – No one in the organized set-up should be allowed to get exploited on his work extraction by any of the nomenclature give to him.

However, it is been very sure that ESI should be deducted on salary alone (Compensation paid for work done) & not the stipend (which is monetary inducing measure to increase performance during training).


No dismissal or punishment during period of sickness:-

Section 73 of the Act provides that no employer shall dismiss, discharge or reduce or otherwise punish an employee during the period employee is in receipt of sickness benefit or maternity benefit.

He also cannot dismiss, discharge or otherwise punish employee when he is in receipt of disablement benefit or is under medical treatment or is absent from work due to sickness.

This gives protection to employee when he is in receipt of sickness benefit or maternity benefit. Employer cannot take disciplinary action against employee in such cases. This provision is grossly misused by employees.


Month wise Statutory Deposits & Returns

January :

ESIC Challan - Before 21st of every preceding month
Monthly Statutory Register Daily/End of the month


February to April

Same as January Month

May :

Before 21st ESIC Challan

Before 12th May ESIC Half yearly Returns

Monthly Statutory Register Daily/End of the month


June to October :

Same as January Month


November :

Before 21st ESIC Challan

Before 11th November ESIC Half Yearly Returns

Monthly Statutory Register Daily/End of the month


December :

Same as January Month


Statutory Forms :

• Form 01 : Employer’s Registration From

• Form 01(A) : Form of Annual Information on Factory/ Establishment

• Form 1 : Declaration Form

• Form 1A : Family Declaration Form

• Form 1B : Changes in Family Declaration Form

• Form 3 : Return of Declaration Form

• Form 4 : Identity Card

• Form 4A : Family Identity Card

• Form 6 : Return of Contributions

• Form 7 : First/Intermediate/Final Certificate, Employee Register

• Form 8 : Special Intermediate Certificate

• Form 10 : Abstention verification in r/o Sickness Benefit/


Temporary Disablement Benefit/MB

• Form 12 : Sickness of Temporary Disablement Benefit

• Form 12A : Maternity Benefit for Sickness

• Form 13 : Sickness or Temporary Disablement or Maternity Benefit for Sickness

• Form 13A : Maternity Benefit for Sickness

• Form 14 : Sickness or Temporary Disablement or Maternity Benefit for sickness

• Form 14A : Maternity Benefit for Sickness

• Form 16 : Accident report from employer (Regulation 68)

• Form 17 : Dependant’s or Funeral Benefit (Death Certificate)

• Form 18 : Dependant’s Benefit (Claim Form)

• Form 18A : Dependant’s Benefit (Claim for periodical payments)

• Form 19 : Maternity Benefit (Notice of Pregnancy)

• Form 20 : Maternity Benefit (Certificate of Pregnancy)

• Form 21 : Maternity Benefit (Certificate of expected confinement)

• Form 22 : Claim of Maternity Benefit

• Form 23 : Maternity Benefit (Certificate of the Confinement of Miscarriage

• Form 24 : Maternity Benefit (Notice of work)

• Form 25 : Claim for Permanent Disablement Benefit

• Form 26 : Certificate for Permanent Disablement Benefit

• Form 27 : Declaration and Certificate for Dependant’s Benefit

• ESIC 37 : Certificate of re-employment/employment

• ESIC 53 : Application for change in particulars of insured person

• ESIC 72 : Application for Duplicate Identity Card
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Other Benefits


Other Benefits
A. Funeral Expenses

Funeral expenses on death of an I.P subject to a maximum of Rs. 2500 payable at the Branch Office.
 
B. Rehabilitation Allowance

Rehabilitation in case of disabled insured persons under 45 years of age with 40 percent or more disablement.

C. Free Supply

Free Supply of physical aids and appliances such as crutches, wheelchairs, dentures, spectacles and other such physical aids.

D. Preventive health care

Preventive health care services such as immunization, family welfare services, HIV/AIDS detection, treatment etc.

E. Confinement Expenses

Confinement Allowance @ Rs. 1000/- is paid to an insured woman or in respect of the wife of an insured person in case she does not avail medical facilities of the scheme for child delivery.
 
F. Rajiv Gandhi Shramik Kalyan Yojana

Unemployment Allowance named as Rajiv Gandhi Shramik Kalyan Yojana, is payable to those workers facing involuntary unemployment due to closure of factory/establishment; retrenchment or permanent invalidity arising out of non-employment injury. The daily rate of unemployment Allowance is at par with the standard sickness Benefit rate which is just above 50% of the daily wages. This allowance is payable for a maximum period of six months either in one spell or in different spells of not less than one month's duration.
 G. Old Age Medical Care

Old age Medical care for self and spouse at a nominal contribution of Rs. 120/- per annum.
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DEPENDENTS-BENEFITS


DEPENDENTS-BENEFITS (Section 52 of the ESI Act)
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
A widow can receive this benefit on a monthly basis for life or till her re-marriage.
A son or daughter can receive this benefit till eighteen years of age.
Other dependants like parents including a widowed mother etc. can also receive this benefit under certain conditions.
The first instalment is payable within a maximum of three months following the death of an insured person and therefore, on a regular monthly basis.

The dependants ’ benefit is payable to the dependants as per Section 52 of the Act read with provision of 6(A) of Section 2 in cases where an IP dies as result of Employment Injury (EI). The age of dependants, has to be determined either by production of Documentary evidence as specified in Regulation 80(2) or Age certified by Medical Officer In charge of Government Hospital or Dispensary.

The minimum rate of DB w.e.f 1.1.90 is Rs.14/- per day and these rates of the DB are increased from time to time. The latest enhancement is with effect from 01.08.2002

NOTES:
Section 60 of the ESI Act provides that ESI benefits are not assignable or attachable.
Section 65 of the ESI Act specifies that where a person is entitled to more than one benefit he/she shall be entitled to choose which benefit he/she shall receive.
Section 71 of the ESI Act states that a benefit is payable upto and including the day of death.
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DISABLEMENT-BENEFITS


DISABLEMENT-BENEFITS (Section 51 of the ESI Act)
Temporary Disablement benefit is paid in cash till the incapacity due to employment injury lasts at the rate of 70% of the wages. In case of permanent physical disablement due to employment injury or occupational disease, disablement benefit is paid for life at a rate proportionate to loss of earning capacity as determined by the medical board.
 
TEMPORARY DISABLEMENT BENIFITS
 
TDB is payable to an employee who suffers employment injury (EI) or Occupational Disease and is certified to be temporarily incapable to work. "Employment Injury" has been defined under Section 2(8) of the Act, as a personal injury to an employee caused by accident or occupational disease arising out of and in the course of his employment, being in insurable employment, whether the accident occurs or the occupational disease is contracted within or outside the territorial limits of India.
 
CERTIFICATES REQUIRED FOR  TDB : CONTRIBUTORY-CONDITIONS
 
Accident Report in form 16, Form 8,9,10, 11 and ESIC Med.13.
 
ELIGIBILITY FOR  TDB :
 
The benefit is not subject to any contributory conditions. An IP is eligible from the day he joins the insurable employment.
TDB Rate is 40% over and above the normal sickness benefit rate. This works out to nearly 85% of the average daily wages.
DURATION OF TDB :
 
There is no prescribed limit for the duration of TDB. This is payable as long as temporary disablement lasts and significant improvement by treatment is possible. If a Temporary Disablement spell lasts for less than 3 days (excluding day of accident), IP will be paid sickness benefit, if otherwise eligible. A special point for IMOs/IMPs is that some IPs may resist taking a Final Certificate especially before 3 days for fear of loss of TDB.
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MATERNITY-BENEFITS (Section 50 of the ESI Act)
Maternity Benefit is admissible to insured women in the event of confinement or miscarriage etc. for 12 weeks and the rate of about 100 percent of the wages.
 
ELIGIBILITY
Maternity Benefit is admissible for :
a
84 days in case of confinement
a
42 days in case of miscarriage.      

This benefit is also admissible for sickness arising out of pregnancy / miscarriage or confinement for a maximum period of one month , additionally. The rate of this benefit is equal to or a little more than the wages i.e. double the standard benefit rate.

Maternity benefit continues to be payable even in the death of an insured woman during her delivery or immediately following the date of her delivery leaving behind a child , for the whole of that period and in case the child also dies, during the said period, until the death of the child.
 
CONTRIBUTORY-CONDITIONS
 
An insured woman is eligible for maternity benefit for confinement / miscarriage, if contributions in respect of her have been paid or payable for not less than 70 days in the two immediately preceding consecutive contribution periods with reference to the Benefit Period in which the confinement took place.
The minimum daily maternity benefit rate is Rs.28/- and maximum is Rs.390/- as per present rates. At present maximum amount of maternity benefit in terms cash, thus, works out to Rs.32760/-
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SICKNESS-RATES


SICKNESS-RATES
Sl.No
Average daily wage slabs
Standard S.B Rates
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
 
Below Rs. 28/-
Rs. 28 and above but below Rs. 32
Rs. 32 and above but below Rs. 36
Rs. 36 and above but below Rs. 40
Rs. 40 and above but below Rs. 48
Rs. 48 and above but below Rs. 56
Rs. 56 and above but below Rs. 60
Rs. 60 and above but below Rs. 64
Rs. 64 and above,6ut below Rs. 72
Rs. 72 and above but below Rs. 76
Rs. 76 and above but below Rs. 80
Rs. 80 and above but below Rs. 88
Rs. 88 and above but below Rs. 96
Rs. 96 and above but below Rs. 106
Rs. 106 and above but below Rs. 116
Rs. 116 and above but below Rs. 126
Rs. 126 and above but below Rs. 136
Rs. 136 and above but below Rs. 146
Rs. 146 and above but below Rs. 156
Rs. 156 and above but below Rs. 166
Rs. 166 and above but below Rs. 176
Rs. 176 and above but below Rs. 186
Rs. 186 and above but below Rs. 196
Rs. 196 and above but below Rs. 206
Rs. 206 and above but below Rs. 216
Rs. 216 and above but below Rs. 226
Rs. 226 and above but below Rs. 236
Rs. 236 and above but below Rs. 250
Rs. 250 and above but below Rs. 260
Rs. 260 and above but below Rs. 270
Rs. 270 and above but below Rs. 280
Rs. 280 and above but below Rs. 290
Rs. 290 and above but below Rs. 300
Rs. 300 and above but below Rs. 310
Rs. 310 and above but below Rs. 320
Rs. 320 and above but below Rs. 330
Rs. 330 and above but below Rs. 340
Rs. 340 and above but below Rs. 350
Rs. 350 and above but below Rs. 360
Rs. 360 and above but below Rs. 370
Rs. 370 and above but below Rs. 380
Rs. 380 and above
 
•  Or full average daily wage whichever is less.
Rs. 14
Rs. 16
Rs. 18
Rs. 20
Rs. 24
Rs. 28
Rs. 30
Rs. 32
Rs. 36
Rs. 38
Rs. 40
Rs. 44
Rs. 48
Rs. 53
Rs. 58
Rs. 63
Rs. 68
Rs. 73
Rs. 78
Rs. 83
Rs. 88
Rs. 93
Rs. 98
Rs. 103
Rs. 108
Rs. 113
Rs. 118
Rs. 125
Rs. 130
Rs. 135
Rs. 140
Rs. 145
Rs. 150
Rs. 155
Rs. 160
Rs. 165
Rs. 170
Rs. 175
Rs. 180
Rs. 185
Rs. 190
Rs. 195
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SICKNESS-BENEFIT


SICKNESS-BENEFIT (Section 49 of the ESI Act)
Sickness Benefit is paid in cash to the insured persons to compensate their loss of wages in the event of sickness certified by an authorised medical officer. It is admissible for 91 days in an year and the cash benefit is equal to 50% of the wages.
 
ELIGIBILITY CONDITIONS FOR SICKNESS BENEFIT & EXTENDED SICKNESS BENEFIT
 
Not less than 78 days contribution in the relevant contribution period for sickness benefit and not less than 156 days contribution in 4 relevant contribution periods and eligibility for sickness benefit at least in one of these contribution periods and two years of service are essential eligibility conditions for Extended Sickness Benefit.
 
ENHANCED-SICKNESS-BENEFIT
 
It is admissible for sterilization operation. Duration is 14 days in case of Tubectomy Operation (extendable by another 7 days on medical advice) and 7 days in case of Vasectomy. Eligibility conditions are same as for sickness benefit mentioned above. The rate approximately equals full wages.
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MEDICAL-BENEFITS


MEDICAL-BENEFITS

Insured persons and their dependants are entitled to full medical care from day one of taking up employment in any factory or establishment covered under the ESI Act 1948. The comprehensive package includes primary medical care, specialists and diagnostic services, in-patient care with provision for all super specialist facilities.

The scheme provides full range of medical care, namely;

  • Out-Patient services
  • Diagnostic services
  • Specialists services
  • Hospital service through a network of ESI dispensaries & Panel clinics, diagnostic centers and ESI Hospitals.etc
The package covers all aspects of health care from primary to super-specialist facilities as detailed below:-

  • Out patient treatment
  • Domiciliary treatment
  • Super-speciality treatment
  • Specialist consultation and diagnostic facilities
  • In-Patient treatment
  • Free supply of drugs and dressings.
  • X-ray and laboratory investigations
  • Vaccination and preventive inoculations
  • Ante-natal care, confinement and post natal care
  • Ambulance Service or conveyance charges for going to hospitals, diagnostic
  • centers, etc. wherever admissible
  • Free diet during admission in hospitals
  • Free supply of artificial limbs, aids and appliances for physical rehabilitation
  • Family welfare services and other national health programe services
  • Medical certification
  • Special provisions including super-speciality treatment.
  • For super-speciality treatment such as

Open Heart Surgery, Neuro Surgery, Bone Marrow Transplant, Kidney Transplant or specialized investigations like CAT scan, MRI, Angiography etc.

Referral arrangements have been made with the reputed , premier hospitals of the country. The total cost of such treatment, diagnostic facilities or surgical intervention is borne by the ESI Scheme.

Though medical care is provided, by and large, to the beneficiaries in modern system of medicine (Allopathic), facilities in indigenous systems such as (i) Ayurveda (ii) Unani (iii) Homoeopathy & Siddha are also being provided to the insured persons, on demand in many areas

Extension of medical cover to the Retired and Disabled Insured Persons and their spouses (Rule 60 & 61 of ESI Central Rules - 1950).

The scheme also provides for a comprehensive medical cover to the retired and disabled insured persons and their spouses on pre-payment of a nominal contribution of Rs.120/- per annum, per couple, provided that the insured person was in continuous insurable employment for at least 5 years before retirement. The scheme, thus, offers total medical cover to the retired and disabled employees without any upper ceiling on expenditure at a very low premium when compared with medical cover schemes introduced by some other insurance agencies in the business of medical insurance.
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OBLIGATIONS



OBLIGATIONS
  1. Obligation of the Employers under the ESI Act and Rules and Regulations made there under are summarized as under:-

  1. Get your Factory/establishment registered within 15 days after the Act becomes applicable. Submit Form01 to the Regional Office for this purpose. Obtain Employers code No. for use in all ESI Forms/documents and correspondence with the offices of the ESI Corporation.
     

  1. 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 Number 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.
     

  1. Pending receipt of identity cards/identity certificates you may issue Certificate of employment in Form 86 to the covered employees enabling them to avail cash/medical benefits.
     

  1. Pay ESI contributions (Employers share @ 4.75% of the wages and the employees share @1.75% of the wages) within 21 days of the month following, in which the wages fall due.
     

  1. Maintain an Accident Book as prescribed under the factory Act/ESI Act.
     

  1. 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.
     

  1. Grant leave to insured employees on the basis of sickness certificates issued by any authorized ESI doctor.

  1. Record Maintenance

    1. Attendance Register in respect of all the employees including employees engaged through immediate employer/contractor
    2. Wage Register
    3. Register under Regulation-32
    4. Accident Book
    5. Cash Book/Books of Account, Ledgers, petty cash book including bills and vouchers
    6. Other relevant records to show the labour charges paid to the labour engaged in construction, repair & maintenance etc
    7. Inspection Book
       

  1. Submit return of contribution within 42 days of the expiry of contribution period.

  1. Furnish any requisite information promptly as and when asked for by the Regional Office/Local Office/any other office of the Corporation/Scheme.

  1. Facilitate proper inspection of factory/establishment by any authorized officer of the Corporation and produce before him all relevant records on demand.

  1. Intimate the date of closure or shifting (temporary or permanent) of the factory/establishment to the Regional Office/Local Office within seven days of its closure or shifting.

  1. Promptly report any change in the business activity, ownership of the concern or its management.

  1. 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.

  1. Maintain proper sanitation for a hygienic and healthy environment within the workplace and in residential quarters if allotted to the insured persons.


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INSPECTIONS




Employers will facilitate Inspecting Officers the lawful discharge of their duties and provide full co-operation in collection of all essential information related to coverage, payment of contributions, maintenance of ESI records etc.

The ESI Inspector or any other authorized officer normally sends advance intimation regarding the inspection of records of a factory or an establishment in his area of operation. On such occasions, the essential records and documents are to be kept ready for inspection and produced on demand before the inspecting authority.

If any labour is engaged either directly or through contractor for carrying out the construction work/ repair and maintenance of the premises/ machinery etc. within the covered premises, the record thereof is also required to be produced before the Inspector as contributions are payable on the labour component. The responsibility for payment of contributions rests with the Principal Employer.

Inspections records to be produced

  • Attendance Registers(s)/Muster Roll(s) in respect of all employees including those employed through contractors

  • Wages register

  • Cash Book /Bank Book

  • Accounts Books including Ledgers with profit and loss account, balance sheet, bills & vouchers

  • Employees' Register (Form 7)

  • Accident Book

  • Returns of contribution (Form 6)

  • Returns of declaration forms (Form 3)

  • Copies of challan

  • Inspection book

If any labour is engaged either directly or through contractor for carrying out the construction work/repair and maintenance of the premises/machinery etc. within the covered premises, the record thereof is also required to be produced before the Inspector as contribution are payable on the labour component. The responsibility for payment of contributions rests with the Principal Employer.

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RECORD MAINTENANCE


RECORD MAINTENANCE

  • Register of Employees in Form -6 (under Regulation 32)

  • Accident Book in Form - 11 (under Regulation 66)

  • Inspection Book (under Regulation 102A)

  • File for copies of return of declaration forms

  • File for copies of Return of Contribution, Challans, etc.

  • File for general correspondence with the Regional Office regarding coverage, inspection etc. and other important circulars.

  • File for copies of Accident Reports and correspondence in connection herewith.

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TIPS FOR EMPLOYERS



TIPS FOR EMPLOYERS




  • Declaration Forms in Form-1 to be filled in properly for registration of employees. The Form should contain all relevant information asked for in respect of each coverable employee and submitted to the Branch Office concerned within ten days of entry into insurable employment. Before filling Declaration Form it should be ensured that the worker was not insured under the ESI Scheme in the past. If so, the old Insurance No. should be indicated in the Form.



  • All fresh entrants into the insurable employment should be advised to furnish two post card size family photographs (of IP and dependants only) with the Declaration Form to the appropriate Branch Office. In case of online submission of Declaration Form Photographs of IP, Family, IPs Signature can be uploaded through Employer's Login.
 



  • Temporary Identification Certificate annexed to the Declaration Form may be obtained from the Branch Office Manager with his seal and signature and issued to the insured employee forthwith. In case of online submission, TIC can be permitted to print at Employer's end,subject to complete data and photographs uploaded.
     



  • On receipt of Permanent Identity Cards from the Local Office the same should be passed on to the insured employees without delay.
     



  • In order to facilitate a newly insured person to avail medical benefit under the Scheme in absence of an identity certificate!' identity card, a 'Certificate of Employment' may be issued to the insured person in Form 86. This certificate, issued by the employer, remains valid for three months but can be revalidated for a further period not exceeding 3 months.
     



  • 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.
     



  • Whenever events, such as, marriage birth or death entails any additions or deletions in the family particulars of an insured person, the requisite information has to be conveyed by the employer in 'Form 1-B to the Branch Office within 15 days from the occurrence of such a change.
     



  • On re-entry of a person into insurable employment or, where an insured person had been disentitled to medical benefit due to non submission of Return of Contribution, the employer may issue a 'Certificate of re-employment' or 'continuing employment' to such person in Form ESIC 37. This certificate will enable the Insured Person to avail medical benefit from the date of issuance.




  • If an insured employee needs a change of dispensary due to any valid reasons an application may be mad in Form 'ESIC53'.




  • Accident Report in respect of an insured employee may be submitted immediately in case of death or serious injury and in other cases within 24 hours of an accident. For this Form 16 be filled up in triplicate and one copy each forwarded to the Branch Office and Dispensary: Form-32 may also be submitted along with the accident report in case an accident has occurred prior to the commencement of the first Benefit Period of the IP to enable the Branch Office determine the rate of Disablement Benefit.




  • Whenever an Insured Person goes out of station on duty or leave he may be issued a certificate in Form ESIC 105. This will enable him and his family to avail medical treatment in ESI Dispensaries/hospitals elsewhere, if available at such outstation.




  • If any insured person is in need of a duplicate identity care, an application may be made to the Branch Office Manager in Form ESIC 72.




  • Return of Contribution may be submitted in time with all relevant particulars neatly filled up against all insured persons with Insurance Numbers in ascending order. Remember, any inadvertent deletion may debar an Insured Person from availing benefit due to him/her.

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APPLICABILITY OF THE ACT & SCHEME:

 Is extended in area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and establish-ments employing 20 or more person upto Rs.15,000/- per month w.e.f. 01.04.10. It has also been extend-ed upon shops, hotels, restaurants, roads motor transport undertakings, equip-ment maintenance staff in the hospitals.

COVERAGE OF EMPLOYEES:

 Drawing wages Upto Rs.15,000/- per month Engaged either directly or thru’ contractor

RATE OF CONTRIBUTION OF THE WAGES:

 Employers’ 4.75%

 Employees’ 1.75%

MANNER AND TIME LIMIT FOR MAKING PAYMENT OF CONTRIBUTION:

 The total amount of contribution (employee’s share and employer’s share) is to be deposited with the authorized bank through a challan in the prescribed form in quadruplicate on ore before 21st of month following the calendar month in which the wages fall due.

BENEFITS TO THE EMPLOYEES UNDER THE ACT:

 Medical Benefit
 Sickness Benefit(SB)
 Maternity Benefit(MB)
 Disablement Benefit
 Dependants’ Benefit(DB)
 Funeral Expenses

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

WAGES FOR ESI CONTRIBUTIONS:

 Registers/files to be maintained by the employers

CONTRIBUTION PERIOD:

 If the person joined insurance employment for the first time, say on 5th January, his first contribution period will be from 5th January to 31st March and his corresponding first benefit will be from 5th October to 31st December.

TO BE DEEMED AS WAGES:

• Basic pay
• Dearness allowance
• House rent allowance
• City compensatory allowance
• Overtime wages (but not to be taken into account for determining the coverage of an employee)
• Payment for day of rest
• Production incentive
• Bonus other than statutory bonus
• Night shift allowance
• Heat, Gas & Dust allowance
• Payment for unsubstituted holidays
• Meal/food allowance
• Suspension allowance
• Lay off compensation
• Children education allowance (not being reimbursement for actual tuition fee)

NOT TO BE DEEMED AS WAGES:

• Contribution paid by kthe employer to any pension/provident fund or under ESI Act.
• Sum paid to defray special expenses entailed by the nature of employment – Daily allowance paid for the period spent on tour.
• Gratuity payable on discharge.
• Pay in lieu of notice of retrenchment compensation
• Benefits paid under the ESI Scheme.
• Encashment of leave
• Payment of Inam which does not form part of the terms of employment.
• Washing allowance for livery
• Conveyance Amount towards reimbursement for duty related journey

PENALTIES :

 Different punishment have been prescribed for different types of offences in terms of Section 85: (I) (six months imprisonment and fine Rs.5000), (ii) (one year imprisonment and fine), and 85-A: (five years imprisonment and not less to 2 years) and 85-C (2) of the ESI Act, which are self explanatory. Besides these provisions, action also can be taken under section 406 of the IPC in cases where an employer deducts contributions from the wages of his employees but does not pay the same to the corporation which amounts to criminal breach of trust.

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