ESI Scheme

Employees State Insurance Scheme of India is an integrated social security scheme tailored to provide social protection to workers and their dependants, in the organised sector, in contingencies, such as, sickness, maternity and death or disablement due to an employment injury or occupational hazard. he ESI !ct, "#$%&' applies to following categories of factories and establishments in the implemented areas() *on)seasonal factories using power and employing ten"#+' or more persons *on)seasonal and non power using factories and establishments employing twenty ",+' or more persons.

he -appropriate .overnment- State or /entral is empowered to e0tend the provisions of the ESI !ct to various classes of establishments, industrial, commercial or agricultural or otherwise. 1nder these enabling provisions most of the State .ovts have e0tended the ESI !ct to certain specific class of establishments, such as, shops, hotels, restaurants, cinemas, preview theatres, motors transport undertakings and newspaper establishments etc., employing ,+ or more persons. he ESI Scheme is mainly financed by contributions raised from employees covered under the scheme and their employers, as a fi0ed percentage of wages. Employees of covered units and establishments drawing wages upto 2s.34++5) per month come under the purview of the scheme for social security benefits. 6owever, employees earning upto 2s.%+5) a day as wages are e0empted from payment of their part of contribution. he State .ovts bear one)eighth share of e0penditure on 7edical 8enefit within the per capita ceiling of 2s.3++5) per annum and all additional e0penditure beyond the ceiling. Employees covered under the scheme are entitled to medical facilities for self and dependants. hey are also entitled to cash benefits in the event of specified contingencies resulting in loss of wages or earning capacity. he insured women are entitled to maternity benefit for confinement. 9here death of an insured employee occurs due to employment injury, the dependants are entitled to family pension

Coverage Coverage of Factories Coverage of Employees Implemented Areas Non Implemented Areas

Coverage
COVERAGE UNDER THE ESI ACT, 1948

he !ct was originally applicable to non)seasonal factories using power and employing ,+ or more persons: but it is now applicable to non)seasonal power using factories employing #+ or more persons and non)power using factories employing ,+ or more persons. 1nder Section #"4' of the !ct, the Scheme has been e0tended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing ,+ or more persons. he e0isting wage)limit for coverage under the !ct, is 2s.;4++5) per month "with effect from #.%.,++%'. AREAS COVERED he ESI Scheme is being implemented area)wise by stages. he Scheme has already been implemented in different areas in the following States51nion erritories STATES !ll the States e0cept *agaland, 7anipur, ripura, Sikkim, !runachal <radesh and 7izoram. UNION TERRITORIES =elhi, /handigarh and <ondicherry COVERAGE : *o. of Insured <erson family units *o. of Employees otal *o. of 8eneficiaries *o. of Insured women *o. of Employers, etc

;$,#,,;++ ;+,&,,>++ >,+;,+#,>++ #>,%;,44+

2,63,650

Coverage
COVERAGE OF FACTORIES he !ct in the first instance applies to all non)seasonal factories, using power and employing #+ or more persons, and to non)power using factories employing ,+ or more persons for wages on any day in implemented areas. here is an enabling provision in the !ct under Section #"4' to e0tend to other classes of establishment ? industrial, commercial, agricultural or otherwise. 7ost of the State .ovts. have e0tended the provision of the !ct to the following class of establishments, i.e., shops, hotels, restaurants, cinemas including preview theatres, road)motor transport agencies, newspaper establishments employing ,+ or more persons. ! factory once covered remains covered even if the number of employees at any later stage falls short of the stipulated number of #+ or ,+ or the manufacturing process therein ceases to be carried on with the aid of power. he !ct does not apply to workers engaged in mining operations, railway running sheds, certain seasonal factories operating for less than ; months in a year. @actories or establishments run by the State .ovts.5 /entral .ovt. whose employees are in receipt of social security benefits substantially similar or superior to those provided under the !ct can be e0empted from coverage.

Coverage
COVERAGE OF EMPLOYEES ! monthly wage limit is prescribed by the /entral .ovt. for the purpose of coverage of employees5workers of the aforesaid factories or establishments. !n employee has been defined under Section ,"$' of the !ct and means any person employed for wages in or in connection with the work of a factory or establishment to which this !ct applies. he wage ceiling is enhanced from time to time. he e0isting ceiling effective from #.#.$; is 2s.3,4++5) per month.

ESI A !"#"$%ra%"o# Ministry of Labour Corporation Standing Committee MEdical Benefit Council Regional Boards Local Committee

Administration
he Employees State Insurance Scheme is administered by a /orporate body called the Employees State Insurance /orporation "ESI/', which has members representing employers, employees, the /entral .overnment, State .overnments, medical profession and the <arliament. ! Standing /ommittee constituted from among the members of the /orporation acts as the E0ecutive 8ody for the administration of the Scheme. here is also a 7edical 8enefit /ouncil to advise the /orporation on matters connected with the provision of 7edical 8enefit. he =irector .eneral who is the /hief E0ecutive of the /orporation is also e0)officio member of the /orporation and of its Standing /ommittee. 8esides the 6Ars.Bffice in *ew =elhi, the /orporation has #; 2egional Bffices and 4 sub)2egional Bffices at <une, *agpur, /oimbatore, 7adurai and 6ubli and &%% Cocal Bffices and /ash offices all over the country for the administration of the Scheme. he 7edical care under the Scheme is administered by State .overnments, who have the statutory responsibility in this regard, e0cept in =elhi State and *oida area of 1.<. 8esides, the ESI 6ospital, D.D. *agar at /hennai, ESI 6ospital, hakurpukur at /alcutta and ESI 6ospital at *agda are also being run directly by the /orporation.

The Corporation

he Employees State Insurance Scheme is administered by a corporate body called the ESI /orporation. he /orporation is the highest policy making and decision taking authority under the ESI !ct and oversees the functioning of the Scheme. he /orporation meets periodically to conduct business as may be reAuired to regulate the functioning of the Scheme. Constitution o Corporation his ape0 body is constituted and notified by the /entral .overnment for a four year term and represents various interest groups comprising employees, employers, the /entral and State .overnments besides the parliament and medical profession. 1nion 7inister of Cabour functions as the /hairman of the /orporation whereas, =irector .eneral ESI/, is also an e0)officio member of the /orporation

The !edica" #ene it Counci"

7edical 8enefit /ouncil is an advisory body on matters related to the administration of medical benefit under the ESI Scheme. he council is constituted by the /entral .ovt. for a specific term and consists of () 1. =irector .eneral, /entral 6ealth Services"e0)officio /hairman' 2. =eputy =irector .eneral5!ddl. =irector .eneral, /entral 6ealth Services. 3. Bne member each representing respective State .ovts. 4. hree members each representing employees, employers and the medical profession. 5. 7edical /ommissioner, ESI /orporation"e0)officio member' he ESI !ct empowers the 7edical 8enefit /ouncil to advise the /orporation on matters related to developments and improvements in the medical service delivery system. he constitution of the /orporation, Standing /ommittee and the 7edical 8enefit /ouncil are dealt with in Section %, & and #+ of the ESI !ct, #$%& respectively. <owers of the Standing /ommittee and duties of the 78/ are given under Section #& and ,, respectively.

The ESI Act$ %&'(

he promulgation of Employees State Insurance !ct, #$%& envisaged an integrated need based social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, death due to employment injury resulting in loss of wages or earning

capacity. the !ct also guarantees reasonably good medical care to workers and their immediate dependants. @ollowing the promulgation of the ESI !ct the /entral .ovt. set up the ESI /orporation to administer the Scheme. he Scheme, thereafter was first implemented at Danpur and =elhi on ,%th @ebruary #$4,. he !ct further absolved the employers of their obligations under the 7aternity 8enefit !ct, #$3# and 9orkmens /ompensation !ct #$,>. he benefit provided to the employees under the !ct are also in conformity with ICB conventions.

#ene its under the ESI Scheme

he section %3 of the !ct envisages following si0 social security benefits () a) !edica" #ene it b. Sic*ness #ene it+S#, E0tended sickness 8enefit"ES8' Enhanced Sickness 8enefit c. !aternit- #ene it+!#, d. =isablement 8enefit i. emporary disablement benefit" =8' ii. <ermanent disablement benefit"<=8'

e. =ependants 8enefit"=8' f. @uneral E0penses

!n interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fi0ed percentage of the workers wages, whereas, they are provided social security benefits according to individual needs without distinction. /ash 8enefits are disbursed by the /orporation through its Cocal Bffices CBs5 7ini Cocal Bffices "7CBs'5Sub Cocal Bffices SCBs'5pay offices, subject to certain contributory conditions. In addition$ the scheme a"so provides some other need .ased .ene its to insured /or*ers) hese includes (

i. ii.

2ehabilitation allowance Eocational 2ehabilitation