:: Welcome To Patel Consultancy. ::
  • Call Today (0261) 653 - 1369,     +91 8000011521,     +91 9824111521 patelconsultancy@live.com
  1. Home
  2. Employees State Insurance

Employees' State Insurance

1.Applicability of the Act & Scheme

Is extended area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and establishments employing 20 or more persons upto Rs. 6500/- per month. It has also been extended upon shops, hotels, restaurants, road motor transport undertakings. equipment maintenance staff in the hospitals.

2.Coverage of employees

Drawing wages (w.e.f. 1-10-2006) upto Rs. 10,0007-per month engaged either directly or thru' contractor.

3.Rate of Contribution of the wages

Employers' 4.75%
Employees' 1.75%

4.The Esi Scheme Today

No. of implemented Centres


No. of Employers covered

2.38 lacs

No. of Insured Persons

85 lacs

No. of Beneficiaries

330 lacs

No. of Regional Offices/SRO's


No. of ESI Hospitals/Annexes


No. of ESI Dispensaries


No. of Panel Clinics


Manner and Time Limit for making payment of contribution

The total amount of contribution (employee's share and employer's share) is to be deposited with the authorised bank through a challan in the prescribed Form in quadruplicate on or before 21" of month following the calendar month in which the wages fall due.

Benefits to the employees under the Act

Medical sickness, extended sickness for certain diseases, enhanced sickness, dependants, maternity, besides funeral expenses, rehabilitation allowance, medical benefit to insured person and his or her spouse.

Wages for Esi Contributions

Registers/fifes to be maintained by the employers

5.To be deemed as wages

Basic pay

Drawing wages (w.e.f. 1-10-2006) upto Rs. 10,0007-per month engaged either directly or thru' contractor.

Dearness allowance

House rent allowance

City compensatory

Overtime wages (but not to be taken 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 unsubstituted holidays

Meal/food allowance

Suspension allowance

Lay off compensation

Children education allowance (not being reimbursement for actual tuition fee)


6.NOT to be deemed as wages

Contribution paid by the employer to any pension/provident fund or

Sum paid to defray special Daily allowance paid for the period spent on tour.

Gratuity payable on discharge

Pay in lieu of notice of retrenchment compensation

Benefits paid under the ESI Scheme

Encashment of leave

Payment of Inam which does not form part of the terms of employment

Washing allowance

Amount towards reimbursement for duty related journey

7.Contribution period

1 st April to 30 th September

1 st October to 31 st March

8.Benefit period

If the person joined insurable employment for the first time, say on contribution period will be from 5th January to 31" March and his corresponding first benefit will be from 5" October to 31" December.


Different punishments have been prescribed for different types of offences in terms of section 85 :
(i) (six months imprisonment and fine Rs. 5,000),
(ii) (one year imprisonment and fine), and 85-A :
(five years imprisonment and not less to 2 years) and 85-C(2) of the ESI Act, which are self-explanatory Besides these provisions, action also can be taken under section 406 of the I PC 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

The ESI Benefits

Employees' State Insurance Act, 1946 Is the first major legislation on comprehensive social security for workers in Independent India. The Act envisages social protection of workers in conceivable exigencies such as deployed In organised sector of Independent India. The details of benefits, conditions for eligibility ana duration or benefits is& as follows;:


Benefits Eligibility Conditions Duration & Scale of Benefits
1. Sickness Benefit (SB)

1 a

Ordinary SB

Payment of contribution for 7B days In one contribution period of 6 months.

Upto 91 days in 2 consecutive benefit periods at the standard Sickness Benefit Rate (S0R) i.e. just above 50% of the wages.

1 b

Enhanced SB

Sams as above

14 flays for ubectomy & 7 days (or vasectomy. extendable on medical advice. Rate Of payment 100% of the wages.

1 C

Extended SB

For 34 specific iong-ierm diseases. Continuous insurable employment for 2 years with 156 days contribution in consecutive contribution periods.

124 days which may be extended up lo 2 years on medical advice during a period of three years in insurance employment. Rate: 70% wages approx.

2. Disablement Benefit (DB)

2 a

Temporary DB

From day 1 of entering employ man! & irrespective of having paid any contribution.

As long as temporary disablement lasts Rate : 70% of wages approx.

2 b

Permanent DB

Same as above

For whole life. Rate ; Up to 70% of wages depending upon loss of earning capacity.

3. Dependents Benefit

From day 1 of entoring insurable employment & Irrespective of having paid any contribution in case of death due to employment injury

For life to the widow or until her re-marriage. To the legitlmate dependant children till the age of 18 years. To dependent parents for life, Rate; 70% of the wages approx. shareable in fixed proportion.

4. Maternity Benefit

Payment of contribution for 70 days in 2 preceding contribution periods (1 year)

12 Weeks in case of normal delivery. 6 weeks in case of miscarriage. Extendable by 4 weeks on medical advice Rate : Almost full wages.

5. Medical Benefit

Full medical facilities for self and dependants from day 1 of entering insurable employment.

Full medical care till disease or disablement lasts. No ceiling or upper limit on expenditure for individual cases, Retired insured persons who have been in insurance employment for atleast 5 years before superannuation and disabled insured persons and entitled to full medical care for self and spouse only on payment of Rs. 120/- as annual contribution.

6. Funeral Expenses

From day 1 of entering insurable employment.

For defraying expenses on the funeral of an Insured person. Rate: Actual expenses subject to a maximum of Rs. 2500/-

7. Vocational Rehabilitation

In case of physical disablement due to employment injury.

As long as vocational training lasts. Actual fee charged or Rs. 45/- a day whichever Is more.

8. Physical Rehabilitation

Same as above

As long as a person is admitted In an artificial llmb center. Rate: 100 percent of wages.

©2017 Patel Consultancy. All Rights Reserved