• Jul
  • 26
  • 2010

All about Employee State Insurance (ESIC) Act, 1948

Wage Limit increased from Rs. 10,000 to Rs. 15,000 for coverage of an employee under the ESIC Act:- The Government of India through notification in the Official Gazette has amended the Employees’ State Insurance (Central) Rules, 1950.  Accordingly, as per rule 50, the wage limit for coverage of an employee under Employees State Insurance Act has been enhanced from Rs. 10,000 to Rs. 15,000 with effect from 1st May 2010.

The Employees State Insurance Act, ESI Act for short, was enacted by the Government of India in 1948.  The major objective of the Act was to provide certain benefits to employees in case of sickness, maternity and injury (during employment) and for providing other benefits in relation to the main objectives.

The Employee State Insurance Act, 1948

The Government of India through notification in the Official Gazette has amended the Employees’ State Insurance (Central) Rules, 1950. Accordingly, as per rule 50, the wage limit for coverage of an employee under Employees State Insurance Act has been enhanced from Rs. 10,000 to Rs. 15,000 with effect from 1 May 2010.

Applicability

The ESI Act, 1948 in the first instance, applies to:

  • Factories using power in the manufacturing process and employing 10 or more persons
  • Non-power using factories or establishments employing 20 or more persons for wages.

The Act contains an enabling provision under which Appropriate Government is empowered to extend the provision of the ESI Act, 1948 to other classes of establishments.

  • Industrial
  • Commercial
  • Agricultural or otherwise

Under these provisions the State Governments have extended the provisions of the ESI Act to the following classes of establishments.

  • Shops
  • Hotels & Restaurants
  • Cinemas including preview Theaters
  • Road Motor Transport Undertaking
  • News Paper Establishments

Wage Ceiling

Employees of covered units and estab­lishments drawing wages upto Rs. 15,000 per month come under the purview of the ESI Act 1948 for multi dimensional social security benefits.

Contribution

ESI scheme is financed by contribution raised from employees covered under this scheme and their employers as a fixed percentage of wages. Rates of contribution are as follows:

  • Employees contribution 1.75% of wages ( Employees earning up to Rs. 50 per day are exempted from payment of their contribu­tion)
  • Employer’s contribution 4.75% of wages.

Social Security Benefits

Various benefits that the insured employees and their dependents are entitled to are as follows

  • Medical Benefits
  • Sickness Benefits
  • Maternity Benefits
  • Disablement Benefits
  • Dependent Benefits
  • Other Benefits  (like   funeral expenses, vocational rehabilitations, free supply of physical aids etc).

Safeguard for Insured Employees:

  • Right to receive payment of any benefit under the Act are not transferable.
  • Employer    shall  not    dismiss, discharge or reduce the wages or otherwise punish a covered employee during the period he/she is in receipt of Sickness Benefit or Maternity Benefit etc.
  • By reason of his liability to pay his share of contribution under the ESI Act, no employer shall directly or indirectly reduce the wages of a covered employee.
  • Right to register their grievances / complaints at any level for immediate redressel.
  • Right to approach ESI Court against any action/decision of the Medical Board etc
  • Cash Benefits payable under the Act are not liable to attachment or sale in execution of any decree or order of any court

Duties of Employer

  • An employer shall apply in Form-01 for coverage under the ESI Act, within 15 days after the Act becomes applicable to a fac­tory or establishment.
  • The employer shall submit Declaration Form in respect of all coverable employees in the unit.
  • The employer shall deposit both employees’ and employers’ contribution as per specified rates within 21 days of the following month.
  • The Employer shall maintain all such records and registers as are required under the Act and produce them for verification / inspection before the authorised officers of the Corporation.
  • The employer shall submit half-yearly Return of Contributions (RC) by 12th May/11th November every year with all columns prop­erly filled.
  • The employer will report any change in business activity, address, ownership or the management to ESIC authorities forthwith.
  • An employer will also ascertain the liability towards ESI dues, while taking over the ownership of a factory/establishment through purchase, gift, lease, licence or otherwise as the new owner is liable to discharge past liabilities.
  • An employer will also ascertain the liability towards ESI dues, while taking over the ownership of a factory / establishment through purchase, gift, lease, licence or otherwise as the new owner is liable to discharge past liabilities.

10 Responses to “All about Employee State Insurance (ESIC) Act, 1948”

  1. Nethravathi says:

    please mention recent amendments in this act and also need more information about benefits

  2. Bolbanda Chetananand says:

    how esic is calculated and also some elaboration about the sickness benefit,disablebenefit these all should mention in the esic.

  3. rajesh vora says:

    if whole contribution (including employees contribution) of esi is borne by employer,then what would be accounting traetment and if the contribution is shown as expenses of employer then employees contribution is allowable under incometax act?

  4. vishal s parate1 says:

    Please define WAGES for the calculation of ESIC

  5. csiva prasadan you fwd the soft copy of challan says:

    I requsting you to provide soft copy of monthly & half yearly chalan.
    Thanks to all

  6. Ahmed says:

    Good Job but it should have been discussed in detail

  7. sunil arya says:

    a recent notification in TOI last week informs about its application to educational institutions in delhi. the same is to be published in extraordinary delhi gazette.

  8. Mahendra says:

    Please define WAGES for the calculation of ESIC

  9. Joyson D says:

    Define the meaning & what benifits of WAGES to be included ,for ESIC?

  10. Mani says:

    Info is good. Bit elaborative info could be given about the benefits.

Leave a Reply