CSM.K.

PANDEY
AMENDMENTS
y WAGESLIMIT RS10000TORs15000.Wef1May
2010
y Inspectors SocialSecurityofficers
y Family extended
y ESICTOOPEN MEDICAL
COLLEGE,PARAMEDICALCOLLEGE
y MedicalFacilitiestootherbeneficiaries
y Thirdpartyparticipation,privateparties
 ESIScheme
y ESISchemeforIndiaisanintegratedsocialsecurity
schemetailoredtoprovideSocialProductionto
workersandtheirdependents,intheorganised
sector,incontingencies,suchasSickness, Maternity
andDeath orDisablementduetoanemployment
injuryorOccupationalhazard
COVERAGE
TheESIAct1948appliesto
y Non seasonalFactoriesusingpowerinand
Employingten(10)orMorepersons
y Non seasonalandnon powerusingfactories
andestablishmentsemployingtwenty(20)or
morepersons
y EmployeesoftheFactoriesandEstablishmentsin
receiptofwagesnotexceedingRs.7500/ Per
montharecoveredunderthisAct.
WAGES FOR ESI CONTRIBUTIONS
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
Nightshift allowance
Payment for un-substituted holidays
Meal / food allowance
Suspension allowance
Lay off compensation
Children education allowance
Heat, Gas & Dust allowance
NOT TO BE DEEMED AS WAGES
Contribution paid by the employer to any
Sum paid to defray special expenses
Gratuity payable on discharge
Pay in lieu of notice retrenchment
Benefits paid under the ESI Scheme
Encashment of leave
Payment of Inam which does mean part
of employment
Washing allowance for livery
Conveyance Amount towards
reimbursement for duty related journey
WAGESDefined
y Wages meansallremunerationpaidorpayableincashto
anemployee,ifthetermsofthecontractofemployment,
expressorimplied,werefulfilledandincludesany
paymenttoanemployeeinrespectofanyperiodof
authorisedleave,lockout,strikewhichisnotillegalor
layoffandotheradditionalremuneration,ifany,paidat
intervalsnotexceedingtwomonths,butdoesnotinclude
:
a).Anycontributionpaidbytheemployertoanypension
fundorProvidentfund,orunderthisact;
b).Anytravelingallowanceorthevalueofanytraveling
concession;
c).Anysumpaidtothepersonemployedtodefrayspecial
expensesentailedonhimbythenatureofhisemployment
;or
d).Anygratuitypayableondischarge.
WAGESDefined
Theabovedefinitionhasthreeparts
1. Allremunerationpaidorpayableincashtoan
employeefollowingfromthetermofemployment
(includingagreement)expressorimplied.The
periodicityofpaymentisnotrelevantinthiscase.
2. Anyadditionalremunerationevenifnotflowingfrom
anyagreementorsettlementbutpaidatintervalsnot
exceedingtwomonths.
3. TheexceptionsasprovidedinClause(a)to(d)above.
Anyremunerationpaidorpayableunderpara1and2
iswagesandchargeabletocontributionwhereasany
amountpaidtowardsitemsmentionedinclause(a)to
(d)arenotwagesandthereforenocontributionis
chargeableontheamount.
Finances
y TheSchemeisprimarilyfundedbycontribution
raisedfromInsuredEmployeesandtheiremployers

y Payablesuchas
1.Employees Contribution 1.75%oftheWages
2.Employers Contribution 4.75%oftheWages
TOTAL 6.5%oftheWages

Employeesinreceiptofanaveragedailywageof
Rs.40/ orLess,areexemptedfromPaymentoftheir
shareofcontribution(w.e.f8.4.00)butareentitledto
allsocialsecuritybenefitsundertheScheme.
Contribution&BenefitPeriod
y EmployeescoveredundertheESIAct,arerequired
topaycontributiontowardstheschemeona
monthlybasis.Acontributionperiodmeansasix
monthtimespanfrom1st Aprilto30th September
and1st Octoberto31st March.
y Cashbenefitsundertheschemearegenerallyliked
withcontributionspaid.Thebenefitperiodstarts
threemonthsaftertheclosureofacontribution
period.Thetwotypeofperiodsareelucidated
below.
ContributionPeriod BenefitPeriod
1st Aprilto30th September1st Januaryto30th June
ofthefollowingyear
1st Octoberto31st March1st Julyto31st Dec.
ADVANTAGESOFEMPLOYERS
y 1.Employersareabsolvedoftheirliabilitiesof
providingmedicalfacilitiestoemployeesandtheir
dependentsinkindorintheformoffixedcash
allowance,reimbursementofactualexpenses,lump
sumgrantoroptingforanyothermedicalinsurance
policyoflimitedscopeunlessitisacontractual
obligationoftheemployer
ADVANTAGESOFEMPLOYERS

2).Employersareexemptedfromtheapplicabilityofthe
:
(a).MaternityBenefitAct
(b).Workmen's CompensationAct
inrespectofemployeecoveredundertheESIScheme
3).Employershavetheirdisposal,aproductivity,well
securedworkforce,anessentialingredientforbetter
productivity
ADVANTAGESOFEMPLOYERS

4).Employersareabsolvedofanyresponsibility
intimesofPhysicaldistressofworkerssuchas
sickness,employmentinjuryorPhysical
disablementresultinginlossofwages,asthe
responsibilityofPayingcashbenefitsshitsto
thecorporationinrespectofinsured
employees

5).Anysumpaidbywayofcontributionunder
theESIActisdeductedincomputingincome
undertheIncomeTaxAct
BenefitstoEmployees
y ESISchemeMajorSocialSecurityBenefitsinCash
andKindinclude

1.MedicalBenefit forself&Family
2.SicknessBenefit forself
3.MaternityBenefit forself
4.DisablementBenefit
a).TemporaryDisablementBenefit forself
b).PermanentDisablementBenefit forself
5.Dependents Benefit fordependentsincaseof
deathduetoemploymentinjury
BenefitstoEmployees
y Inaddition,theSchemealsoprovidessomeotherneed
basedbenefitstoinsuredworkers.Theseare:
i).FuneralExpenses toapersonwho
performsthelastritesofIP
ii).Rehabilitationallowances forself
iii).VocationalRehabilitation forself
iv).OldageMedicare forselfandspouse
v).MedicalBonus forinsuredwomenand
IPswife
MedicalBenefit
y MedicalBenefitmeansMedicalcareofIPsand
theirfamilies,wherevercoveredformedical
benefit.
y TheStandardmedicalcareconsistsofoutdoor
treatment,inpatienttreatment,allnecessary
drugsanddressing,pathologicalandradiological
specialistconsultationandcare,antenataland
postnatalcare,emergencytreatmentetc.,
y Outdoormedicalcareisprovidedatthestate
InsuranceDispensariesorMobileDispensaries
mannedbyfulltimedoctors(service system)or
attheprivateclinicsofInsuranceMedical
Practitioners(PanelSystem)
MedicalBenefit
y Insuredworkerandmembersofhisfamilyareeligiblefor
medicalcarefromtheveryfirstdayoftheworkercoming
underESIScheme.
y Aworkerwhoiscoveredundertheschemeforfirsttimeis
eligibleformedicalcarefortheperiodofthreemonths.If
he/shecontributesatleastfor78daysinacontribution
periodtheeligibilityisthereuptotheendofthe
correspondingbenefitperiod.
y Aworkerisalsoeligibleforextendedsicknessbenefit
whenhe/sheissufferingfromanyoneofthelongterm34
diseaseslistedintheAct.Thisisadmissibleafterthe
workerhasbeenunderESItheseconditionsaresatisfied
medicalbenefitisadmissibleforamaximumperiodof730
daysfortheIPandhis/herfamily.
SicknessBenefit

y Sicknesssignifiesastateofhealthnecessitating
Medicaltreatmentandattendanceandabstention
fromworkonMedicalgrounds.Financialsupport
extendedbythecorporationissuchacontingency
iscalledsicknessBenefit

y SicknessBenefitrepresentsperiodicalpayments
madetoanInsuredPersonfortheperiodof
certifiedsicknessaftercompleting9Monthsin
insurableemployment.
BenefitstoEmployees

y Toqualifyforthisbenefit,contributionsshould
havebeenpayableforatleast78daysinthe
relevantcontributionperiod.
y TheMaximumdurationforavailingsickness
Benefitis91daysintwoconsecutivebenefit
periods
y Standardbenefitrate thisrate correspondsto
theaveragedailywageofanInsuredperson
duringthecorrespondingcontributionperiodand
isroughlyhalfofthedailywagerate.
ExtendedSicknessBenefit
y ExtendedSicknessBenefitisaCashBenefitpaidfor
prolongedillness(Tuberculosis/Leprosy,Mentaland
Malignantdiseases)duetoanyofthe34Specified
diseases

y TheIPshouldhavebeenincontinuousemployment
foraperiodof2yearsandshouldhavecontributedfor
atleast156daysin4precedingcontributionperiods
ExtendedSicknessBenefit
y ThedailyrateofExtendedSicknessBenefitis40%
morethanthestandardSicknessBenefitrate
admissible

y AfterexhaustingsicknessBenefitPayablefor91days
theExtendedSicknessBenefitispayableuptofurther
periodof124/309daysthatcanbeextendedupto2
yearsinspecialcircumstances
EnhancedSicknessBenefit
y IsCashBenefitforIPundergoingsterilisation
operationofvasectomy/tuberctomyforfamily
planning.
y Thecontributoryconditionsarethedameasfor
claimingsicknessbenefits
y Thedailyrateofthisbenefitisdoublethe
standardbenefitrate.Say,notlessthanthedaily
wage.
y Thebenefitrateofthisbenefitisdoublethe
standardbenefitrate.Say,notlessthanthedaily
wage.
y Thebenefitisavailableupto7daysforvasectomy
andupto14daysfortubectomyoperations.
MaternityBenefit

y MaternityBenefitiscashpayabletoanInsured
womenforthespecifiedperiodofabstentionfrom
workforconfinementormiscarriageorfor
sicknessarisingoutofpregnancy,confinement
prematurebirthofchildormiscarriage
confinement connoteslabourafter26weeksof
pregnancywhethertheresultissueisaliveor
dead,

y Miscarriage meansexpulsionofthecontentsofa
pregnantuterusatanyperiodpriortoorduring
26th weekofpregnancy.
MaternityBenefit
y Criminalabortionormiscarriagedoesnot,however,
entitletobenefit.
y ThecontributionconditionisthesameasforSickness
Benefit.
y ThedailybenefitrateisdoublethesicknessBenefit
rateandisthusroughlyequivalenttothefullwages.
BenefitsispaidforSundaysalso.
MaternityBenefit

y TheBenefitispaidasfollows(Duration)
a).ForConfinement
Foratotalperiod12Weeksbeginningnotmore
than6weeksbeforetheexpecteddateofchild
birth,iftheinsuredwomendiesduring
confinementorwithin6weeksthereafter,leaving
behindthelivingchild,thebenefitcontinuesto
bepayableforthewholeoftheperiod.Butthe
childalsodieduringthatperiod,thebenefitwill
bepaiduptoandincludingthedayofthedeathof
thechild.
MaternityBenefit

b).ForMiscarriage
Fortheperiodof6weeksfollowingthe
dateofmiscarriage
c).Forsicknessarisingoutofpregnancy,
confinement,Prematurebirthofchildor
miscarriage:
Foranadditionalperiodoruptofourweeks.
Inallthecases,thebenefitispaidonlyifthe
insuredwomendoesnotworkforremuneration
duringtheperiodforwhichbenefitisclaimed.
Thereisnowaitingperiod.
MaternityBenefit

y MedicalBonus
MedicalBonusislumpsumpaymentmadetoan
Insuredwomanorthewifeofaninsurespersonin
caseshedoesnotavailmedicalfacilityfromanESI
hospitalatthetimeofdeliveryofachild.Thisbonus
ofRs.250/ hasbeenincreasedtoRs.1000/ from1st
April2003
DisablementBenefit
a).Temporarydisablementbenefit:

y Incaseoftemporarydisabilityarisingoutofan
employmentinjuryoroccupationaldisease.,
y Disablementbenefitisadmissibletoinsured
personfortheentireperiod socertifiedbyan
InsuranceMedicalofficer/Practitionerforwhich
IPdoesnotworkforwages.
y Thebenefitisnotsubjecttoanycontributory
conditionandispayableataratewhichisnotless
than70%ofdailyaveragewages.
y However,notpayableiftheincapacitylastsfor
lessthan3daysexcludingthedateofaccident.
Permanentdisablementbenefit
y Incaseanemploymentinjuryoroccupational
diseaseresultsinpermanent,partialortotalloss
ofearningcapacity,
y PeriodicalpaymentsaremadetotheIPforlifeat
aratedependingontheactuallossofearning
capacityasmaybedeterminedandcertifiedbya
dulyconstitutedMedicalBoard.
y TheratesofDisablementBenefitsaredetermined
inaccordancewiththeprovisionsofRule57of
ESI(Central)Rules,1991.
y Inordertoproducterosioninrealvalueofthe
periodicalpaymentsofPermanentDisablement
benefits,againstriseinthecostoflivingindex,
periodicalincreasesaregranted,basedon
actuarialcalculation
Permanentdisablementbenefit
y Commutationofperiodicalpaymentsintolumpsum
(onetimepayment)ispermissiblewherethe
permanentdisablementstandsassessedasfinaland
dailyrateofbenefitdoesnotexceedRs.1.50.perday.
y CommutationofPermanentDisablementBenefit
intolumpsumpaymentisalsoallowedincasethe
totalcommutedvaluedoesnotexceedRs.10000/
(TheceilingisnowbeingraisedtoRs.30000/).
Dependants Benefit
y DependentsBenefitisamonthlypensionpayabletothe
eligibledependentsofaninsuredpersonwhodiesasa
resultofanEmploymentInjuryoroccupationaldisease
y BeneficiariesandDurationofbenefit
a).Widow/widowsduringlifeoruntilremarriage
b).Legitimateoradoptedsonuntilage18oriflegitimate
sonisinfirm,tillinfirmitylasts.
c).Legitimateoradoptedunmarrieddaughteruntilage18
oruntilmarriage,whicheverisearlier,orifinfirm,till
infirmitylastsandshecontinuestobeunmarried.
Intheabsenceofanywidoworlegitimatechild,the
benefitispayabletoaparentorgrandparentforlife,to
anyothermaledependentuntilage18ortoanunmarried
orwidowedfemaledependentuntilage18.
Dependants Benefit
y Howmuch

y Thetotaldivisiblebenefitisequivalenttothetemporary
disablementbenefitrate(roughly70%ofthewagerate).
Thewidow/widowsshare3/5th ofthebenefitandthe
legitimateoradoptedsonanddaughter2/5th eachofthe
benefit.Ifthetotalbenefitsodividedexceedsthefullrate,
thereisaproportionatereductionintherespectivesharesof
thebeneficiaries.
y Theamountofpensionpaidtothedependentsofa
deceasedinsuredpersonisreviewedvisvisthecostof
livingindexandincreasesaregrantedfromtimetotimeto
compensateforerosioninitsrealvalue.
OtherBenefit
(i). Funeral Expenses

Funeral Expenses are in the nature of lump

sum payment up to a maximum of Rs.2500/-
made to defray the expenditure on the funeral
of deceased IP. 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.
OtherBenefit

RehabilitationAllowance
Thecorporation,videitsResolutiondated22.12.1979,
resolvedtograntrehabilitationAllowancetotheIPs,
foreachday,onwhichtheyremainadmittedinan
Artificiallimbcentre.Ontherates,whichgenerally
confirmtodoubletheStandardSicknessBenefitrate.
Theabovebenefitwasintroducedwitheffectfrom
1.1.1980
LevyofInterest&Damages
y UnderSection39(5)(a)oftheESIact,readwithRegulation
31(A)oftheESI(General)Regulations1950,theemployeris
liabletopaysimpleinterestattherateof15percentperannum
inrespectofeachdayofdefaultordelayinpayment
contributions.Inaddition,undertheProvisionofRegulation31
CofESI(General)Regulations,1950,readwithsec.85(B)(i)of
theESIAct,theCorporationisempoweredtorecoverdamage
asunder:
Periodofdelayin RateofDamages
paymentofContribution ontheamountdue
i).Uptolessthan2months 5%
ii).2monthsandabovebutlessthan4months10%
iii).4monthsandabovebutlessthan6months15%
iv).6monthsandabove 25%
Interestanddamagescanalsorecoveredasarrearsofland
revenueSection45(c)toSection45(I)bytheRecoveryOfficerof
ESICorporation.
ObligationoftheEmployers
1).GetyourFactory/establishmentregisteredwithin15
daysaftertheActbecomesapplicable.SubmitForm01to
theRegionalofficeforthispurpose.ObtainEmployers
codeNo.foruseinallESICForms/documentsand
correspondencewiththeofficesoftheESICorporation.
2).FillupDeclarationFormsinrespectofallcoverable
employeesandsubmitthesametotheRegionalOffice/
LocalOfficeofthecorporationwellbeforetheAppointed
Day andobtaininsuranceNumbersfromtheconcerned
LocalOffice/RegionalOffice,Inrespectofnewly
appointedemployees,fillupthedeclarationformsoon
afterappointmentofsuchemployeesandsubmitthesame
totheLocalOfficeConcerned.
ObligationoftheEmployers
3).Pendingreceiptofidentitycards/identity
certificatesyoumayissuecertificateofemployment
inForm86tothecoveredemployee(s)enablingthem
toavailcash/medicalBenefits
4).PayESIcontribution(Employee'sShare@4.75%and
theEmployersshare@1.75%ofthewages)within21
daysofthemonthfollowing,inwhichthewagesfall
due.
ObligationoftheEmployers
5).MaintainanAccidentBookasprescribedunder
theFactoryAct/ESIAct.
6).SubmitanAccidentReporttotheLocalOffice/
ESIDispensaryconcernedimmediatelyinrespect
ofaccidentsthatcouldresultindeathor
disablementandwithin24hoursofitsoccurrence
otherwise.Minoraccidentswhichdonotcause
absencefromworkneednotbereported
7).Grantleavetoinsuredemployeesonthebasisof
sicknesscertificatesissuedbyanyauthorisedESI
doctor.
ObligationoftheEmployers
Maintainthefollowingrecords/registersproperlyforthe
purposeofinspection
1. AttendanceRegisters/MusterRolls(inrespectofall
employeesincludingthoseemployedthrough
contractors)
2. Wageregister
3. CashBook/BankBook
4. AccountBooksincludingLedgersandVouchers,
BalanceSheet.
5. Employees Register
6. AccidentBook
7. ReturnsofContribution
8. ReturnofDeclarationForms
9. CopiesofChallans
10. InspectionBook
ObligationoftheEmployers
9.Submitreturnofcontributionwithin42daysof
theexpiryofcontributionperiod.
10.Intimatethedateofclosureofshifting
(TemporaryorPermanent)oftheFactory/
EstablishmenttotheRegionaloffice/LocalOffice
withinsevendaysofitsclosureorshifting
11.Promptlyreportchangeinbusinessactivity,
ownershipoftheconcernoritsmanagement.
12.AscertaintheliabilitytowardsESIdues,while
takingovertheownershipofany
factory/establishmentbypurchase,gift,leaseor
licenseorinanyothermannerwhatsoeverasnew
ownerisliabletodischargethepastliabilitiesif
any
ThankYou..