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| Brief | FAQs |           THE EMPLOYEES' STATE INSURANCE ACT, 1948


 

The Employees State Insurance Act, 1948, provides to workers not only accident benefit but also other benefits such as sickness benefit, maternity benefit and medical benefit.

 

Wage Ceiling: Every employee drawing wages upto Rs. 15000.00 per month is required to be insured under the Act.

 

Objective of the Act: The object of the Act is to secure sickness, maternity, disablement and medical benefits to employees of factories and establishments and dependents benefits to the dependents of such employees.

 

Applicability:-Section 2(9) 'employee' under ESI means any person who is engaged/employed for wages/salary in connection with the work of the establishment to which this Act applies. But does not include any person whose wages (excluding OT) exceed the limit prescribed by the Central Govt. (which is 15000 pm now with effect from 1 May 2010).

 

Section 2(12) 'establishment/factory' under ESI means any premises whereon 20 or more persons are employed or were employed for wages.

If you combine both, you understand that if the total employees are 25 but out of which 14 are drawing gross more than 15000 pm, then only 11 employees come under ESIS and the criteria for 20 employees does not fulfill. Hence on above grounds it is not covered.

 

CHECK LIST

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 establishments employing 20 or more person upto Rs.15,000/- per month with effect from 01-May-2010.  It has also been extend-ed upon shops, hotels, restaurants, roads motor transport undertakings, equipment maintenance staff in the hospitals.

 

 

 

 

 

 

 

 

 

 

 

Coverage of Employees

 

Drawing wages upto Rs. 15000.00 per month engaged either directly or through contractor

 

 

 

Rate of contribution of the wages

 

Employer's  4.75%

Employee's 1.75%

 

 

The ESI Scheme Today

 

 Benefits to employees

 

 

 

No. of implemented Centres

No. of Employers covered

No. of Insured Persons

No. of Beneficiaries

No. of Regional Offices/SROs

No. of ESI Hospitals/Annexes

No. of ESI Dispensaries

No. of Panel Clinics

677

2.38 lacs

85 lacs

330 lacs

26

183

1453

2950

 

Medical, sickness, extended sickness for certain diseases, dependents maternity, besides funeral expenses, rehabilitation allowance, medical benefit to insured person and his or her spouse.

 

 

 

 

 

 

 

 

 

 

 

WAGES FOR ESI CONTRIBUTIONS

Registers / Files to be maintained by the employers

 

 

 

 

 

Manner and Time Limit for making Payment of Contribution 

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 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 Allowance

  • Children Education Allowance (not being reimbursement for actual tuition fees

 

Not to be deemed as Wages

  • Contribution paid by the employer to any pension / provident of 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 term of employment

  • Washing Allowances for livery

  • Conveyance amount towards reimbursement for duty related journey

 

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

 

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.

  • 1st April to 30th September

  • 1st October to 31st March

 

 

 

 

 

 

 

 

 

 

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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