AN OVERVIEW OF THE

ESI ACT

BY
ESIC AURANGABAD
 What is ESI Act ?

 It is the First Social Security Legislation In Independent

India.
 Was passed by the Parliament in 1948
 Came into effect in the year 1952, 24th February at Kanpur.
 It is an Act to provide certain benefits to Employees in case of
 Sickness
 Maternity
 Employment Injury
 Certain other matters.
 Coverage

 It is a process by which the Act is brought into effect at a

determined place.
 A Notification is issued by the Central Government under
Section 1(3) of the Act, with a specific date for
implementation.
 From the date of Notification all coverable
Factory/Establishment should register themselves under the
Act and obtain code No and do Compliance.
 Applicability for Coverage
 1. Factory:
 Having 10 or more persons working and manufacturing
activity is being carried out. Coverage done as per Sec 2(12) of
Act.
 2. Establishment:
 Having 20 or more employees working and coverage done as
per Sec 1 (5) of the Act. Examples (shops, contractors etc)

 As per Sec 1(6) of the Act, once a factory/establishment is

covered, it will remain covered even if the employee strength
falls below the required limit.
 Basic Concepts
 1. Wage Limit for Coverage:
 Upto Dec-2016 : Rs 15000/- pm
 From 01-01-2017 : Rs. 21000/-pm

 2. Rate of Contribution:
 Employee Share : 1.75 %
 Employer Share : 4.75 %
 Total Payable 6.5 %
 In newly Implemented areas for the Initial 2 years rate of
contribution will be :
 Employee Share : 1%
 Employer Share : 3%
 Total Payable 4%
 Basic Concepts
 3. Contribution Period and Benefits Period:-
 (Regulation 4 of ESI (Gen) Regulation 1950)

CONTRIBUTION PERIOD BENEFIT PERIOD

APRIL – to- SEPTEMBER JANUARY-to-JUNE

OCTOBER-to MARCH JULY-to DECEMBER

 Sickness Benefits can be availed after expiry of 9

months from the date of insurable employment
 Registration
 Employer:
 Under Regulation 10-B, Employer to whom this Act applies
should complete registration within 15 days from the
applicability.
 Employees:
 Under Regulation 12 and 14, Employer to ensure all Employees
are registered immediately and not later than 10 days.
 (Details of family, Nominee, Bank Details, Adhar No to be
taken)

 Registration to be done Online at [Link]

 No Documentation needed.
 BENEFITS
 Medical Benefits
 Sickness Benefits
 Disablement Benefits
 Dependents Benefits
 Maternity Benefits
 Unemployment Allowance (RGSKY)
 Confinement Expenses
 Funeral Expenses
 Vocational Training
 Rehabilitation Expenses
 Artificial limbs
 BENEFITS-Important Definitions
 Employee: (Section 2(9) )
 Person employed for wages upto Rs 21000/- pm
 Directly by the Company or Through Contractor.
 Part time, Daily wages, Piece rated,
 Working in all the departments(Factory, Admn, Sales etc)

 Insured Person : (Section 2(14) )

 Any person who was or is an Employee
 For whom any contribution were paid or payable
 Who is entitled to any of the benefits under the Act.
 BENEFITS-Important Definitions
 Family: Section 2(11)
 Spouse
 Minor legitimate/Adopted child
 Dependant child upto age of 21 years if studying/ unmarried daughters
 Infirm Child dependant on the IP irrespective of age.
 Dependant Parents whose income is less than the limit prescribed.
 For Unmarried IP, if his/her parents not alive, then dependant minor
brothers and sisters.
 The family particulars as per above will be entered in the ID
particulars of the IP and they will be eligible for medical
facilities.
 BENEFITS-Important Definitions
 Dependants: Section 2(6-A)
 Widow,
 Son upto age of 25 years
 Daughters till marriage
 Widowed Mothers
 Infirm Son/Daughters dependent on the Income of IP even if age More
than 25 years
 The dependents are eligible for Dependents benefits in case of
death of IP due to employment injury.
 Important Definitions
 Definition of Wages:
 All Component except Washing Allowance
 Over time to be excluded for deciding coverage but to be
included for payment of Contribution.
 For employee getting salary less than Rs.130/- per day, only
employer share of contribution to be paid.
 Employee covered at the start of any Contribution Period will
stand to be covered till the end of that CPE even if his wages
exceed the limit. Contribution will be paid on the higher
amount.
 BENEFITS
 MEDICAL BENEFITS:
 Responsibility for Medical Benefits belongs to State Government.
 There are following 3 types of Medical benefits:

TYPE NATURE OF PROBLEMS PROVIDED AT

PRIMARY BASIC AILMENTS ESIS DISPENSARY/

INSURED MEDICAL
PRCTIONERS
SECONDARY BASIC HOSPITALIZATION, GIVEN AT ESIS HOSPITAL
INCLUDING SURGERIES
TERTIARY HIGHER AT ESIC
(SST) TREATMENT/SURGERIES HOSPITALS/PRIVATE TIE
UP HOSPITALS

 Primary and Secondary treatment available to IP and family from 1st

day of employment.
 BENEFITS
 MEDICAL BENEFITS:

Conditions for Super Specialty Treatment:

 Continuous employment for 2 years on date of diagnosis
 At least 156 days of Contribution paid during immediate 4 CP.
 Should be eligible for Sickness Benefits in at least 2 Benefit Period.
 Treatment would be cashless after getting Referral letter from
Medical Superintendant ESIS Chikalthana Hospital.
 In emergency can be directly taken to any of the Tie-up Hospital for
treatment and the formality of Referral can be taken later.

 Note:
 In case of Employment Injury IP will be eligible for SST treatment from the
first day itself.
 BENEFITS
SICKNESS BENEFITS:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION

SICKNESS 78 days Contribution to Upto 91 days in 2 70 % of average

be paid in relevant CPE consecutive Benefit wages
period

ENHANCED SB SAME AS ABOVE 07 Days for Men 100 % wages

14 days for Women
For 34 specified long
EXTENDED SB term disease. Maximum upto 730 80 % of wages
2 year Continuous days.
Employment and 156 days
Contribution in 4 CPE
 BENEFITS
DISABLEMENT BENEFITS:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION

DAY 1 of Insurable As long as 90 % of last

TEMPORARY Employment for Temporary wages
DISABLEMENT employment Injury cases disablement last

PERMANENT DAY 1 of Insurable As per loss of

DISABLEMENT Employment for For Whole Life Earning
employment Injury cases Capacity
calculated by
Medical Board
 BENEFITS
DEPENDENTS BENEFIT:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION

DAY 1 of Insurable ForWidows whole

DEPENDENT Employment for life or re-marriage. 90 % of wages
BENEFIT employment Injury cases Son upto age of 25 subject to the
years defined ratio of
Daughter till dependents.
marriage
Widowed mother
dependent whole
life
 BENEFITS
MATERNITY BENEFIT:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION

70 DAYS UPTO 26 WEEKS

MATERNITY CONTRIBUTIONS TO BE 1 month more for 100 % of wages
BENEFIT PAID BY THE INSURED sickness arising out
WOMEN IN 2 PREVIOUS of pregnancy duly
CONTRIBUTION certified by the
PERIODS doctor
 BENEFITS
OTHER BENEFIT:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION
CONFINEMENT IW/Wife of IP is eligible For 2 confinement Rs. 5000/- per
EXPENSES if confinement takes only case.
place at location where
ESI Hospital is not
available.
FUNERAL From Day 1 of Insurable For funeral Maximum of Rs
EXPENSES employment expenses on death 10000/-.
of IP
 BENEFITS
OTHER BENEFIT:

NAME OF CONTRIBUTORY DURATION RATE

BENEFITS CONDITION
Unemployment For Loss of Employment Maximum 24 1. 0-12 Months:
Allowance due to : month. 50 % of Last
Closure of Average
Factory/Retrenchment/ Wages
Permanent Disablement 2. 13-24 Months:
due to Non-Employment 25 % of Last
Injury. Average
Contribution to be paid Wages.
for minimum 2 years
 EMPLOYER: Duties and
Responsibilities
 Register your Factory/Establishment immediately as per Reg.
 Ensure all your Employees (including Contractors) are
registered immediately on date of joining.
 Pay Contribution within 21 days as specified.
 Ensure compliance of Contractor employees as well.
 Notify the changes in Company Particulars online.
 Get the unit inspected within 3 days upon marking by the
Unified Web Portal.
 File the Accident Reports within time limit.
Employment Injury:
 The Employment Injury should satisfy all the 4 conditions:
 Personal Injury to an Employee.
 Caused by an Accident or Occupational Disease.
 Arising out of employment in a covered Factory/Estt.
 In the course of employment in covered factory/Estt.
 In case of Commuting Accident:
 Apart from the above 4 conditions, there should be Nexus
established between circumstances, time and place in which the
accident occurred and the Employment
PENAL ACTION FOR NON COMPLIANCE
 Non Payment/Delayed Payment of Contribution:
 Assessment as per Sec 45-A will be done.
 Interest will be charged @ 12 % pa
 Damages will be imposed @ upto maximum of 25 %
 Criminal and Civil Prosecution will be initiated under Sec 85 (a)
to (g) which will attract fine and imprisonment upto 3 year
maximum.
 Recovery Action like attachment of Bank accounts, Property and
Arrest could be initiated for non payment.
 For Delaying Registration of IP’s, Prosecution of
violation of Reg 12 to 14 will be taken along with recovery of
any benefit payment made to Ips/Dependents under Sec 68.
 Revenue Generation and Sharing
Expenditure on Medical Care
 Revenue is Generated only by way of Contribution.
 As per Sec 58 of the Act the State Govt to provide Medical
Arrangement.
 Expdt on Medical Care is shared by ESIC with State Govt in
Ratio 7/8th to 1/8th within the Ceiling.
 The Ceiling limit was Rs 1500/- pa per IP family which has
been increased to Rs 2150/- for year 2016-17. (43 % UP)
No of Registered Ceiling Limit Amount 7/8th Share paid
Ips in SRO (IP*Ceiling by ESIC to State
Aurangabad. limit) Govt.
1.5 lakh Rs 1500/- 22.5 crores 19.70 crores

1.5 lakh Rs 2150/- 32.25 crores 28.22 crores

 Statistical Data
 All India Data regarding Revenue and Expenditure:

Head of A/c 2013-14 2014-15 % Growth

Income 9632 crore 10870 crore 13 %`

Medical Expdt 4860 crore 5715 crore 18 %

Cash Benefits 599 crore 685 crore 15 %

Share of
Medical Expdt 50 % 53 %

 % of Administrative Expenditure is around 8.9 % of Revenue

which is less than the limit of 15 % fixed by Government
 NEW INITIATIVES TAKEN FOR
IMPROVEMENT
 All the transaction done in IT Enabled Environment.
 Employers have been empowered totally.
 No documentation asked for registration of employers/Ips
 Only E-payment through Net Banking by Employer leading
to real-time credit of contribution.
 Single Insurance No which is valid in entire India for IP’s.
 All benefit payment directly deposited to the account of Ips.
 No ESI related record to be kept manually as all will be
available in system.
 No manual filing of 6 monthly Returns.
 Simplified Inspection Policy with transparent system
generated marking through Labour Ministry UWP.
 NEW INITIATIVES TAKEN FOR
IMPROVEMENT
 Liberal Improvements in Cash benefits
 Definition of family and dependents modified
 Eligibility criteria reduced from 3 years to 2 year for RGSKY.
 Period of benefits in RGSKY and Maternity benefits increased.
 Amnesty to reduce Litigation was launched.
 District wise implementation of scheme initiated.
 Coverage limit increased to Rs 21000/-
 New scheme by name of SPREE launched from
20/12/16.
 LIN (Labour Identification Number ) verification
being done.
 Migrating to One Unit Identifier concept.
 NEW INITIATIVES TAKEN FOR
IMPROVEMENT
 Action for Improving Medical Services:
 From 2018-19 onwards the Ceiling amount raised to Rs 3000/- from the present Rs.
2150/- (40% more funds for Medical)
 Upgradation of dispensaries to mini 6 bedded centres.
 ESIS dispensaries to be shifted to new modern locations and rent to be paid by ESIC.
 ESIC is involved in improving the infrastructure of ESIS Hospital through Hospital
Development Committees.
 ESIC is exploring to provide directly through PPP Model for
 Dialysis, Path Labs, X-ray, Dental services.
 ICU, Ultra Sound, Oncology,
 Engagement of Hospital Manager, IT Manager/Assistant for ESIS Hospitals.
 ESIC is also providing Manpower on Contract basis (Medical Officers and Para-
medics) to tide over the shortage in the ESIS Hospitals
 ESIC is requesting the State Governments to establish Subsidiary State
Level Corporation for running Medical Services.
 INITIATIVES
At SRO Aurangabad
 Pendency in Benefit Settlement:
 Death Cases
 12 cases we have settled within 3 months and balance we will be settling in the
next 15-20 days.
 Permanent Disablement Cases
 As on date we have 50-60 cases lined up for reference to Medical board.
 SSMC has constituted Medical Board at local level in ESIS Hospital itself.

 Examples of Dependents Benefits being provided:

Insurance No Name of IP Contribution Paid DB Rate Sanctioned

2503090754 Dilip Bornare Rs 1776/- Rs 338/-per day (Rs 10140)
2503090522 Rahul Choudahri Rs 200/- Rs 291/- pd (Rs 8730/-)
2503120637 Yunus Gani Sk Rs 500/- Rs. 408/- pd (Rs. 12240/-)
2503057306 Kaka Rakhunde Rs. 2933/- Rs 342/- pd (Rs. 10260/-)
THANK YOU ALL