EMPLOYEES' STATE INSURANCE ACT, 1948
The Employees’ State Insurance Act, 1948 is devised so as to provide social protection to workers in contingencies such as illness, long term sickness or any other health risk due to exposure to employment injury or occupational hazards. ESI Act is the first of its kind in India as it introduces the compulsory insurance of a specified class of wage earners against certain inevitable risk and to uphold the human dignity of fellow feelings in contingencies, such as death, disease or physical disability. Employees’ State Insurance Corporation i.e. ESIC is a Government body formed by the Ministry of Labour and Employment, India which dedicatedly operates under this Act
- This Act is extended in area wise to factories using power and employing 10 or more persons and non-power using manufacturing units and establishments employing 20 or more person upto Rs 21,000.00 per month e.f. 1st January 2017
- It has also been extended upon shops, hotel, restaurants, roads, motor transport undertaking, equipment maintenance staff in hospitals
- The factories and establishments shall continue to be administered by this Act despite the number of persons employed therein at any time falls below the aforesaid limit
- Employees employed by a contractor are directly covered under ESI Act and the Schemes thereto
The ESI Act covers employees earning wages upto Rs. 21000.00 per month, engaged either directly or through contractor
Therapeutic, sickness, extended illness for certain disease, enhanced sickness, old age care dependents, maternity, beside funeral expenses, rehabilitation allowance, medical advantage to insured person and his or her spouse, medical bonus & Physical Aids
RATE OF CONTRIBUTION OF THE WAGES
1st April to 30th September
1st October to 31st March
THE ESI SCHEME TODAY (as on 31.3.2009)
State/Union Territories covered 29
No. of implemented Centers 782
No. of Employers covered 1.25 crore
No. of Insured Person 1.29 crore
No. of Beneficiaries 5 crore
No. of ESI Hospitals 145
(a) Subject to the rules, any person holding a certificate of enrollment and liable to pay tax at the rate of rupees 1700, 2200 or as the case may be, 2500 per annum, may discharge his liability for payment of tax under this Act for a total continuous period of five years by making payment in advance of a lump sum amount equal to four times of such rate of tax on or before the 30th June of the year.
(b) If any such lump sum payment is not made on or before Such date, but is made on or before the end of the year, such person shall be liable to pay an additional lump sum amount for the period of delay at the rate of rupees 200/- per month, in addition to the amount of lump sum payable under clause (a)
(c) Any increase or decrease in the rate of tax shall not vary the liability of tax payable by such person who has paid such lump sum amount in lieu of tax.
MANNER AND TIME LIMIT FOR MAKINF PAYMENT OF CONTRIBUTION
The total amount of contribution (employee’s share and employer’s share) is to be deposited with the authorized 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
If a person joined insurable 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
WAGES FOR ESI CONTRIBUTION
To be deemed as:
- Basic pay
- Dearness allowance
- City compensatory allowance
- Overtime wages (but not take into account for determining the coverage of an employee)
- Payment for day of rest
- Production incentive
- Bonus other than statutory bonus
- Night shift allowance
- Heat,Gas & Dust allowance
- Payment for un-substituted holidays
- Meal/foods allowances
- Suspension allowance
- Lay-off Compensation
- Childreneducation allowance(not being reimbursement for actual tuition fee)
Not to be deemed as wages
- Contributionpaid by the employer to any pension/provident fund or under ESI Act
- Sumpaid to defray special expenses entailed by the nature of employment Daily allowance paid for the period spent on tour
- Gratuity payable ondischarge
- Payin lieu of notice of retrenchment compensation
- Benefitspaid under the ESI Scheme
- Encashment ofleave
- Paymentof Inam which does not form a part of the terms of employment
- Washing allowance forlivery
Different punishment have been prescribed for different types of offences as follows In terms of Section 85: (i) (six months imprisonment and fine Rs.5000), (ii) (one year imprisonment and fine)
In terms of Section 85-A: Imprisonment upto five years imprisonment and but not less to 2 years
Section 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.
Registration under the Act: –
The establishment must have 10 employees as per the amendment in the ESIC Act’1948 w.e.f 01-04-2011 for the purpose of getting registered under the ESIC Act’1948. Form-01 and other supporting documents are required to fill up including all the details of the establishment and 6 months advance draft in favour of SBI A/c ESIC is to be sending along with. We undertake to prepare all the papers/documents for the purpose.
ESIC Challans: –
Computation of contribution of both employee & employer share amount payable and preparation of online Challans for depositing the ESIC amount with the SBI and handling over to Accounts department of the establishment within 3 days(or earlier) from the date of receipt of salary/wages statement for for payment of EPF dues.
Form-1- declaration form: –
Particulars required to be obtain from the beneficiaries for the purpose of getting temporary numbers we undertake to obtain the same with the help of administrative staff of the establishment.
Getting the Temporary numbers:
Particulars of new beneficiaries needed to be entered on the website of ESIC to get the Temporary Insurance cards. We undertake to prepare the same as and when required.
We undertake all correspondence work between the establishment and the ESIC authorities. For this purpose, draft letters/ draft replies are prepared by us for submission to the concerned ESIC authorities.
Inspection under the act: –
Attending the periodical inspection and coordinating with the inspecting authorities as also replying to the observations recorded in the inspection book.
Visit to the concerned ESIC Office: –
Deputing field staff for the purpose of submission of various Forms and to maintain liaison with the concerned authorities.
Suggestions to the Management: –
Apprising the management of the amendments effected in the ESIC Act from time to time and making suggestions for compliance and implementation of the Act