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Employees State Insurance Act,1948 (ESI)

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 centers in the country namely Kanpur and Delhi with 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 the Indian Constitution, in particular Articles 41,42 and 43 which enjoin the state to make effective provisions for securing the right to work, education, and public assistance in cases of unemployment, old age, sickness, and disablement. The Act strives to materialize these objects only to a limited extent. This Act becomes a wider spectrum than Factories Act.

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 different States or 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 matters in relation thereto as the preamble to this Act reflects.
  2. To evolve a scheme of socio-economic welfare and make elaborate provisions in respect of it.
  3. To provide social and economic justice to the poor labor class of the land.
  4. To provide labor welfare which includes welfare activities done for the 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 the remainder of the employee’s life in case of permanent disablement.
  • Maternity Benefit: ESIC helps an employee welcome their baby to a household that has been showered with benefits. ESIC provides a total of 100% of the average daily wages for 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.