The Employees State Insurance Act ,1948

 The ESI scheme is a self-financed

comprehensive social security scheme
devised to protect the employees covered
under the scheme against financial
distress arising out of events of sickness,
disablement or death due to employment
injuries.
 applicable to all factories and other
establishments as defined in the Act with 10 or
more persons employed in such establishment
 monthly wage does not exceed Rs 21,000
 The scheme under the act also supports
restaurants, motor road transports, newspaper
establishments and undertakings, movies and
purview theatres, hotels, shops.
Employee’s ESI Employer’s ESI
Contribution Contribution
(0.75% Of Gross (3.25% Of Gross
Salary) Salary)

Total ESI Contribution (4% Of Gross

Salary)
 ESIC contribution rates (Reduced w.e.f. 15/02/2019)

Particulars Current Rate Reduced Rate

Employer Share 4.75% 4.00%

Employee Share 1.75% 1.00%

Total 6.50% 5.00%

 categorized under two categories,
 1) cash benefits (which includes sickness,
maternity, disablement (temporary and
permanent), funeral expenses, rehabilitation
allowance, vocational rehabilitation and
medical bonus) and,
 2) non-cash benefits through medical care.
 The following benefits are provided under
section 46.
 Medical benefit
 Sickness benefit
 Maternity benefit
 Disablement benefit
 Dependents benefit
 Funeral expenses
 Full medical care is provided to all persons
registered under ESI and their family members
– from the day the person enters insurable
employment.
 Medical care is also provided to retired and
permanently disabled insured persons and their
spouses on payment of a token annual premium
of Rs.120/-.
 Sickness benefit in the form of cash
compensation at the rate of 70% of wages is
payable to insured workers during the periods
of certified sickness for a maximum of 91 days
in a year.
 In order to qualify for sickness benefit, the
insured worker is required to contribute for 78
days in a contribution period of 6 months.
 Workers suffering from malignant and long-
term diseases can claim extended sickness
benefit for upto two years at an enhanced rate
of 80% of wages. Also, enhanced sickness
benefit equal to full wage is payable to insured
persons undergoing sterilization for 7 days/14
days for male and female workers respectively
 Maternity benefit for confinement/pregnancy
is provided for three months, which is
extendable by further one month on medical
advice at the rate of full wage subject to
contribution for 70 days in the preceding year.
 Permanent disablement, whether total or
partial, caused by an accident arising out of and
in the course of employment.
 90% of wage is payable so long as temporary
disability continues.
 Permanent disablement benefit is payable at the
rate of 90% of wage in the form of monthly
payment
 When an insured employee dies as a result of
an employment injury, his widow and children
and in case the employee does not leave
behind him a widow or children, his other
dependents, are entitled to receive periodical
payments.
 Dependent benefit is paid at the rate of 90% of
wage in the form of monthly payment
 In case of death of an insured employee, the
eldest surviving member of his family, and if the
employee had no family or was not living with
his family at the time of his death, then the
person who actually incurs expenditure on the
funeral of the employee, is entitled to receive the
a payment called “funeral expenses” of
Rs.10,000/-
 employee is not entitled to receive two
benefits at the same time
 (a) Both sickness benefit and maternity
benefit;
 (b) Both sickness benefit and disablement
benefit for temporary disablement; or
 (c) Both maternity benefit and disablement
benefit for temporary disablement.
 the Act allows courts to punish employers
with imprisonment as well as fines. In certain
cases, even employees can be liable for
punishment under the Act.
 Section 84: Penalty for false statements
 Section 85: Penalty for non-compliance with
provisions
 Section 85(a): Penalty for failure to pay a
contribution
 Section 85(b) to (g): Penalty for non-
compliance with other requirements
 Section 85-A: Punishment for repeating an
offense
 Section 85-B: Power of ESI Corporation to
recover contributions
 Section 85-C: Court’s power to direct
payment of contribution
 Section 86-A: Offences by companies
 complete medical care and attention are provided
by the scheme to the employee
 During absenteeism from work due to illness,
maternity or factories accidents which result in
loss of wages complete financial assistance is
provided to the employees to compensate for the
wage loss.
 The scheme provides medical care to family
members also.
 As on 31 March 2017, 2.93 crore employees are
covered under this scheme with the total number
of beneficiaries summing up to 12.40 crores.