Employees State Insurance Act,1948 (ESI)

Employees State Insurance Act,1948

The Employees State Insurance Act was promulgated by the Parliament of India in the year 1948. To begin with the ESIC Scheme was initially launched on 24 February  1952 at just two industrial centres in the country namely Kanpur and Delhi with a total coverage of about 1.20 lac workers. The Act tries to attain the goal of socio-economic justice enshrined in the directive principles of state policy under part IV of Indian Constitution, in particular Article 41,42 and 43 which enjoin the state to make effective provision for securing the right to work, to education and public assistance in cases of unemployment, old age, sickness and disablement. The Act strive to materialize these objects through only to a limited extent. This Act becomes a wider spectrum than Factories Act.

Employees State Insurance Act,1948

Short Title and Commencement of Employees State Insurance Act

  1. This Act may be called the Employees State Insurance Act, 1948.
  2. It extends to the whole of India.
  3. It shall come into force on such date or dates as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and for different States or for different parts thereof.
  4. The Act shall apply to all factories other than seasonal factories.

Objectives of Employees State Insurance Act

  1. To provide certain benefits to employees in case of sickness, maternity and employment injury and to make provisions for certain other matter in relation thereto as the preamble to this Act reflects.
  2. To evolve a scheme of socio-economic welfare and making elaborate provisions in respect of it.
  3. To provide social and economic justice to the poor labour class of the land .
  4. To provide labour welfare which includes welfare activities done for intellectual, physical, moral and economic betterment of workers whether by employers, by government or by other agencies for the improvement of worker’s standard of living and promotion of their social and economic well-being.

Benefits of Employees State Insurance Act

  • Medical Benefits: The Employee State Insurance Corporation takes care of an individual’s medical expenses by providing reasonable medical care. This cover comes into effect from day one of the individual’s employment.
  • Disability Benefit: In case an employee is disabled, ESIC ensures that the employee is paid their monthly wages for the period of the injury in case of a temporary disablement or for the remainder of the employee’s life in case of a permanent disablement.
  • Maternity Benefit: ESIC helps an employee welcome their baby to a household which has been showered with benefits. ESIC provides a total of 100% of the average daily wages for a period of to 26 weeks from the time of going into labor and 6 weeks in case of a miscarriage. 12 weeks of pay is provided in the case of an adoption.
  • Sickness Benefit: ESIC ensures that there is a flow of cash coming into the employee’s household during medical leave. 70% of the average daily wages of an employee is paid during medical leave for a maximum period of 91 days in two successive benefit periods.
  • Unemployment Allowance: ESI provides a monthly cash allowance for a maximum period of 24 months in case of permanent invalidity due to a non-employment injury or due to involuntary loss of employment.
  • Dependent’s Benefit: In case the employee meets with an untimely death due to an injury at the place of employment, ESIC will provide monthly payments apportioned among the surviving dependents.
  • Other benefits that are offered with ESI are:
    • Confinement Expenses.
    • Funeral Expenses.
    • Physical Rehabilitation.
    • Vocational Training.