EMPLOYEES’ STATE INSURANCE ACT, 1948
OVERVIEW, OBJECTIVES, AND KEY PROVISIONS
Presented by:
Ayisha . R and Aswini . S
B.Com (CS)
III – “A”
Shift 2
INTRODUCTION
The Employees’ State Insurance Act, 1948 is a social welfare law aimed at
providing medical and financial benefits to workers in times of need. It was
introduced to protect employees against risks like sickness, maternity,
injury, and disability. The Act led to the formation of the Employees’ State
Insurance Corporation (ESIC), which manages the scheme across India.
It ensures that workers and their families receive medical care and cash
benefits, helping them during difficult times.
DEFINITION OF EMPLOYEES’ STATE INSURANCE ACT, 1948
The Employees’ State Insurance Act, 1948 is a social welfare
legislation enacted by the Government of India to provide
financial protection and medical benefits to employees in case of
sickness, maternity, disability, or employment-related injury. It
ensures that workers receive healthcare and compensation through
a contributory scheme managed by the Employees’ State
Insurance Corporation (ESIC).
APPLICABILITY OF THE ACT
Applies to all factories and specified establishments.
Employees earning ₹21,000 or less per month.
Mandatory for employers having 10 or more workers.
Extended to shops, cinemas, hotels, and other notified
establishments.
OBJECTIVES OF ESI ACT 1948
Social Security for Workers :
The main aim is to provide social security to employees by protecting them
from health and income-related risks due to sickness, injury, or maternity.
Medical Care Benefits :
It ensures free and full medical care for insured persons and their families
through hospitals, clinics, and dispensaries managed by ESIC.
Financial Protection During Illness :
Employees receive cash benefits when they are unable to work due to
illness, maternity, or temporary/permanent disability, reducing their
financial burden.
Support for Dependents :
In case of death due to employment injury, the Act provides financial
support to the dependents of the deceased worker.
Rehabilitation of Disabled Workers :
It promotes rehabilitation for workers who suffer from permanent disability
by offering monetary help and medical support.
Improved Working Conditions :
By offering benefits and services, the Act encourages better working
environments, health awareness, and safety measures at workplaces.
BENEFITS TO EMPLOYEES
Medical Benefit (full medical care for insured person & dependents).
Sickness Benefit (cash for up to 91 days in a year).
Maternity Benefit (26 weeks leave with pay).
Disablement Benefit (for temporary or permanent injury).
Dependent’s Benefit (for family in case of death).
PENALTIES FOR NON-COMPLIANCE UNDER ESI ACT, 1948
1. Failure to pay contributions – Imprisonment up to 2 years and fine up to ₹5,000.
2. Giving false information – Imprisonment up to 6 months or fine up to ₹2,000, or both.
3. Obstructing an inspector – Punishable with imprisonment or fine.
4. Recovery of dues – Pending contributions can be recovered with interest and damages.
5. Prosecution – Legal action may be taken against defaulting employers.
CONCLUSION
The Employees’ State Insurance Act, 1948 is a landmark legislation in India’s labour welfare system. It
plays a crucial role in ensuring that workers in the organized sector are protected from financial hardships
arising due to health issues, injuries, or maternity. By offering medical benefits, cash compensations, and
support to dependents, the Act not only safeguards the interests of employees but also promotes a sense of
security and well-being among the workforce. The Act encourages a healthier working environment and
increases only safeguards the interests of employees but also promotes a sense of security and well-being
among the workforce. The Act encourages a healthier working environment and increases employee
productivity by ensuring timely support during emergencies. It also creates a strong employer-employee
relationship by mandating the employer’s role in securing their employees’ welfare. Overall, the ESI Act
stands as a vital pillar of social security, contributing to the economic and social development of the
country.
