Employees’ State Insurance

Employees’ State Insurance (ESI) is a social security and health insurance scheme for Indian workers. The scheme is managed by the Employees’ State Insurance Corporation (ESIC), a statutory body under the Ministry of Labour and Employment, Government of India. The scheme provides financial assistance and medical benefits to employees and their dependents.

History of Employees’ State Insurance

The Employees’ State Insurance Act was enacted in 1948, and the scheme was launched on February 24, 1952, in Delhi. The scheme was initially applicable to non-seasonal factory workers who were earning up to Rs. 1,600 per month. Over the years, the scheme has been expanded to cover all types of workers, including contractual and temporary employees.

The scheme was introduced to provide social and economic security to workers and their families. The scheme is funded by contributions from employers and employees, and it is managed by the ESIC at the national level and by the state governments at the regional level.

Who is Covered under Employees’ State Insurance?

The scheme covers all employees who are working in factories, establishments, and other organizations that employ 10 or more workers. The scheme is also applicable to shops, hotels, restaurants, and cinemas that have a turnover of more than Rs. 20 lakhs per year.

Employees who are earning Rs. 21,000 or less per month are covered under the scheme. The scheme also covers employees who are disabled or have a chronic illness. Employees who are covered under the scheme are entitled to medical benefits, cash benefits, and other facilities.

Medical Benefits under Employees’ State Insurance

The scheme provides medical benefits to employees and their dependents. The medical benefits include free medical treatment and hospitalization, including surgical procedures. The scheme also covers the cost of medicines, medical appliances, and diagnostic tests.

The scheme has a network of dispensaries, hospitals, and clinics that provide medical services to employees and their dependents. The scheme also provides ambulance services and referral services to specialized hospitals.

Cash Benefits under Employees’ State Insurance

The scheme provides cash benefits to employees during periods of disability or illness. The cash benefits include sickness benefit, maternity benefit, and disability benefit. The scheme also provides a dependent’s benefit to the dependents of employees who have died due to work-related injuries or illnesses.

The sickness benefit is paid at the rate of 70% of the employee’s daily average wage. The maternity benefit is paid for a period of 26 weeks, and it is available to female employees who have contributed to the scheme for at least 80 days in the preceding two contribution periods.

Employer and Employee Contributions

Under the scheme, both employers and employees are required to make contributions. Employers are required to contribute 4.75% of the employee’s wages, while employees are required to contribute 1.75% of their wages. The contributions are based on the employee’s gross salary, which includes basic salary, dearness allowance, and other allowances.

The contributions are deposited with the ESIC, and they are used to fund the medical and cash benefits provided under the scheme.

FAQ

What is the Employees’ State Insurance Scheme?

The Employees’ State Insurance Scheme is a social security and health insurance scheme for Indian workers. The scheme provides financial assistance and medical benefits to employees and their dependents.

Who is covered under the Employees’ State Insurance Scheme?

The scheme covers all employees who are working in factories, establishments, and other organizations that employ 10 or more workers. The scheme is also applicable to shops, hotels, restaurants, and cinemas that have a turnover of more than Rs. 20 lakhs per year.

What are the benefits provided under the Employees’ State Insurance Scheme?

The scheme provides medical benefits, cash benefits, and other facilities to employees and their dependents. The medical benefits include free medical treatment and hospitalization, including surgical procedures. The cash benefits include sickness benefit, maternity benefit, and disability benefit. The scheme also provides a dependent’s benefit to the dependents of employees who have died due to work-related injuries or illnesses.

How are the contributions under Employees’ State Insurance Scheme calculated?

Under the scheme, both employers and employees are required to make contributions. Employers are required to contribute 4.75% of the employee’s wages, while employees are required to contribute 1.75% of their wages. The contributions are based on the employee’s gross salary, which includes basic salary, dearness allowance, and other allowances.

How is the Employees’ State Insurance Scheme managed?

The scheme is managed by the Employees’ State Insurance Corporation (ESIC), a statutory body under the Ministry of Labour and Employment, Government of India. The scheme is funded by contributions from employers and employees, and it is managed by the ESIC at the national level and by the state governments at the regional level.