AN OVERVIEW OF THE
ESI ACT
BY
ESIC AURANGABAD
What is ESI Act ?
 It is the First Social Security Legislation In Independent
India.
 Was passed by the Parliament in 1948
 Came into effect in the year 1952, 24th February at Kanpur.
 It is an Act to provide certain benefits to Employees in case of
 Sickness
 Maternity
 Employment Injury
 Certain other matters.
Coverage
 It is a process by which the Act is brought into effect at a
determined place.
 A Notification is issued by the Central Government under
Section 1(3) of the Act, with a specific date for
implementation.
 From the date of Notification all coverable
Factory/Establishment should register themselves under the
Act and obtain code No and do Compliance.
Applicability for Coverage
 1. Factory:
 Having 10 or more persons working and manufacturing
activity is being carried out. Coverage done as per Sec 2(12) of
Act.
 2. Establishment:
 Having 20 or more employees working and coverage done as
per Sec 1 (5) of the Act. Examples (shops, contractors etc)
 As per Sec 1(6) of the Act, once a factory/establishment is
covered, it will remain covered even if the employee strength
falls below the required limit.
Basic Concepts
 1. Wage Limit for Coverage:
 Upto Dec-2016 :
 From 01-01-2017 :
Rs 15000/- pm
Rs. 21000/-pm
 2. Rate of Contribution:
Employee Share :
1.75 %
Employer Share :
4.75 %
Total Payable
6.5 %
In newly Implemented areas for the Initial 2 years rate of
contribution will be :
 Employee Share :
1%
 Employer Share :
3%
 Total Payable
4%




Basic Concepts
 3. Contribution Period and Benefits Period: (Regulation 4 of ESI (Gen) Regulation 1950)
CONTRIBUTION PERIOD
BENEFIT PERIOD
APRIL – to- SEPTEMBER
JANUARY-to-JUNE
OCTOBER-to MARCH
JULY-to DECEMBER
 Sickness Benefits can be availed after expiry of 9
months from the date of insurable employment
Registration
 Employer:
 Under Regulation 10-B, Employer to whom this Act applies
should complete registration within 15 days from the
applicability.
 Employees:
 Under Regulation 12 and 14, Employer to ensure all Employees
are registered immediately and not later than 10 days.
 (Details of family, Nominee, Bank Details, Adhar No to be
taken)
 Registration to be done Online at www.esic.in
 No Documentation needed.
BENEFITS
 Medical Benefits
 Sickness Benefits
 Disablement Benefits
 Dependents Benefits
 Maternity Benefits
 Unemployment Allowance (RGSKY)
 Confinement Expenses
 Funeral Expenses
 Vocational Training
 Rehabilitation Expenses
 Artificial limbs
BENEFITS-Important Definitions
 Employee:
(Section 2(9) )
 Person employed for wages upto Rs 21000/- pm
 Directly by the Company or Through Contractor.
 Part time, Daily wages, Piece rated,
 Working in all the departments(Factory, Admn, Sales etc)
 Insured Person : (Section 2(14) )
 Any person who was or is an Employee
 For whom any contribution were paid or payable
 Who is entitled to any of the benefits under the Act.
BENEFITS-Important Definitions
 Family:
Section 2(11)
 Spouse
 Minor legitimate/Adopted child
 Dependant child upto age of 21 years if studying/ unmarried daughters
 Infirm Child dependant on the IP irrespective of age.
 Dependant Parents whose income is less than the limit prescribed.
 For Unmarried IP, if his/her parents not alive, then dependant minor
brothers and sisters.
 The family particulars as per above will be entered in the ID
particulars of the IP and they will be eligible for medical
facilities.
BENEFITS-Important Definitions
 Dependants:
Section 2(6-A)
 Widow,
 Son upto age of 25 years
 Daughters till marriage
 Widowed Mothers
 Infirm Son/Daughters dependent on the Income of IP even if age More
than 25 years
 The dependents are eligible for Dependents benefits in case of
death of IP due to employment injury.
Important Definitions
 Definition of Wages:
 All Component except Washing Allowance
 Over time to be excluded for deciding coverage but to be
included for payment of Contribution.
 For employee getting salary less than Rs.130/- per day, only
employer share of contribution to be paid.
 Employee covered at the start of any Contribution Period will
stand to be covered till the end of that CPE even if his wages
exceed the limit. Contribution will be paid on the higher
amount.
BENEFITS
 MEDICAL BENEFITS:
 Responsibility for Medical Benefits belongs to State Government.
 There are following 3 types of Medical benefits:
TYPE
NATURE OF PROBLEMS
PROVIDED AT
PRIMARY
BASIC AILMENTS
ESIS DISPENSARY/
INSURED MEDICAL
PRCTIONERS
SECONDARY
BASIC HOSPITALIZATION,
INCLUDING SURGERIES
GIVEN AT ESIS HOSPITAL
TERTIARY
(SST)
HIGHER
TREATMENT/SURGERIES
AT ESIC
HOSPITALS/PRIVATE TIE
UP HOSPITALS
 Primary and Secondary treatment available to IP and family from 1st
day of employment.
BENEFITS
 MEDICAL BENEFITS:
Conditions for Super Specialty Treatment:
Continuous employment for 2 years on date of diagnosis
At least 156 days of Contribution paid during immediate 4 CP.
Should be eligible for Sickness Benefits in at least 2 Benefit Period.
Treatment would be cashless after getting Referral letter from
Medical Superintendant ESIS Chikalthana Hospital.
 In emergency can be directly taken to any of the Tie-up Hospital for
treatment and the formality of Referral can be taken later.




 Note:
 In case of Employment Injury IP will be eligible for SST treatment from the
first day itself.
BENEFITS
SICKNESS BENEFITS:
NAME OF
BENEFITS
CONTRIBUTORY
CONDITION
DURATION
RATE
SICKNESS
78 days Contribution to
be paid in relevant CPE
Upto 91 days in 2
consecutive Benefit
period
70 % of average
wages
ENHANCED SB
SAME AS ABOVE
EXTENDED SB
07 Days for Men
14 days for Women
For 34 specified long
term disease.
Maximum upto 730
2 year Continuous
days.
Employment and 156 days
Contribution in 4 CPE
100 % wages
80 % of wages
BENEFITS
DISABLEMENT BENEFITS:
NAME OF
BENEFITS
CONTRIBUTORY
CONDITION
DAY 1 of Insurable
TEMPORARY
Employment for
DISABLEMENT employment Injury cases
PERMANENT
DISABLEMENT
DAY 1 of Insurable
Employment for
employment Injury cases
DURATION
RATE
As long as
Temporary
disablement last
90 % of last
wages
For Whole Life
As per loss of
Earning
Capacity
calculated by
Medical Board
BENEFITS
DEPENDENTS BENEFIT:
NAME OF
BENEFITS
DEPENDENT
BENEFIT
CONTRIBUTORY
CONDITION
DURATION
DAY 1 of Insurable
ForWidows whole
Employment for
life or re-marriage.
employment Injury cases Son upto age of 25
years
Daughter till
marriage
Widowed mother
dependent whole
life
RATE
90 % of wages
subject to the
defined ratio of
dependents.
BENEFITS
MATERNITY BENEFIT:
NAME OF
BENEFITS
MATERNITY
BENEFIT
CONTRIBUTORY
CONDITION
DURATION
70 DAYS
UPTO 26 WEEKS
CONTRIBUTIONS TO BE 1 month more for
PAID BY THE INSURED sickness arising out
WOMEN IN 2 PREVIOUS of pregnancy duly
CONTRIBUTION
certified by the
PERIODS
doctor
RATE
100 % of wages
BENEFITS
OTHER BENEFIT:
NAME OF
BENEFITS
CONTRIBUTORY
CONDITION
DURATION
RATE
CONFINEMENT
EXPENSES
IW/Wife of IP is eligible
if confinement takes
place at location where
ESI Hospital is not
available.
For 2 confinement
only
Rs. 5000/- per
case.
FUNERAL
EXPENSES
From Day 1 of Insurable
employment
For funeral
expenses on death
of IP
Maximum of Rs
10000/-.
BENEFITS
OTHER BENEFIT:
NAME OF
BENEFITS
CONTRIBUTORY
CONDITION
Unemployment For Loss of Employment
Allowance
due to :
Closure of
Factory/Retrenchment/
Permanent Disablement
due to Non-Employment
Injury.
Contribution to be paid
for minimum 2 years
DURATION
RATE
Maximum 24
month.
1. 0-12 Months:
50 % of Last
Average
Wages
2. 13-24 Months:
25 % of Last
Average
Wages.
EMPLOYER: Duties and
Responsibilities
 Register your Factory/Establishment immediately as per Reg.
 Ensure all your Employees (including Contractors) are





registered immediately on date of joining.
Pay Contribution within 21 days as specified.
Ensure compliance of Contractor employees as well.
Notify the changes in Company Particulars online.
Get the unit inspected within 3 days upon marking by the
Unified Web Portal.
File the Accident Reports within time limit.
Employment Injury:
 The Employment Injury should satisfy all the 4 conditions:
 Personal Injury to an Employee.
 Caused by an Accident or Occupational Disease.
 Arising out of employment in a covered Factory/Estt.
 In the course of employment in covered factory/Estt.
 In case of Commuting Accident:
 Apart from the above 4 conditions, there should be Nexus
established between circumstances, time and place in which the
accident occurred and the Employment
PENAL ACTION FOR NON COMPLIANCE
 Non Payment/Delayed Payment of Contribution:
 Assessment as per Sec 45-A will be done.
 Interest will be charged @ 12 % pa
 Damages will be imposed @ upto maximum of 25 %
 Criminal and Civil Prosecution will be initiated under Sec 85 (a)
to (g) which will attract fine and imprisonment upto 3 year
maximum.
 Recovery Action like attachment of Bank accounts, Property and
Arrest could be initiated for non payment.
 For Delaying Registration of IP’s, Prosecution of
violation of Reg 12 to 14 will be taken along with recovery of
any benefit payment made to Ips/Dependents under Sec 68.
Revenue Generation and Sharing
Expenditure on Medical Care
 Revenue is Generated only by way of Contribution.
 As per Sec 58 of the Act the State Govt to provide Medical
Arrangement.
 Expdt on Medical Care is shared by ESIC with State Govt in
Ratio 7/8th to 1/8th within the Ceiling.
 The Ceiling limit was Rs 1500/- pa per IP family which has
been increased to Rs 2150/- for year 2016-17. (43 % UP)
No of Registered
Ips in SRO
Aurangabad.
Ceiling Limit
Amount
(IP*Ceiling
limit)
7/8th Share paid
by ESIC to State
Govt.
1.5 lakh
Rs 1500/-
22.5 crores
19.70 crores
1.5 lakh
Rs 2150/-
32.25 crores
28.22 crores
Statistical Data
 All India Data regarding Revenue and Expenditure:
Head of A/c
2013-14
2014-15
% Growth
Income
9632 crore
10870 crore
13 %`
Medical Expdt
4860 crore
5715 crore
18 %
Cash Benefits
599 crore
685 crore
15 %
Share of
Medical Expdt
50 %
53 %
 % of Administrative Expenditure is around 8.9 % of Revenue
which is less than the limit of 15 % fixed by Government
NEW INITIATIVES TAKEN FOR
IMPROVEMENT
 All the transaction done in IT Enabled Environment.
 Employers have been empowered totally.
 No documentation asked for registration of employers/Ips
 Only E-payment through Net Banking by Employer leading





to real-time credit of contribution.
Single Insurance No which is valid in entire India for IP’s.
All benefit payment directly deposited to the account of Ips.
No ESI related record to be kept manually as all will be
available in system.
No manual filing of 6 monthly Returns.
Simplified Inspection Policy with transparent system
generated marking through Labour Ministry UWP.
NEW INITIATIVES TAKEN FOR
IMPROVEMENT
 Liberal Improvements in Cash benefits
 Definition of family and dependents modified
 Eligibility criteria reduced from 3 years to 2 year for RGSKY.
 Period of benefits in RGSKY and Maternity benefits increased.
 Amnesty to reduce Litigation was launched.
 District wise implementation of scheme initiated.
 Coverage limit increased to Rs 21000/ New scheme by name of SPREE launched from
20/12/16.
 LIN (Labour Identification Number ) verification
being done.
 Migrating to One Unit Identifier concept.
NEW INITIATIVES TAKEN FOR
IMPROVEMENT
 Action for Improving Medical Services:
 From 2018-19 onwards the Ceiling amount raised to Rs 3000/- from the present Rs.






2150/- (40% more funds for Medical)
Upgradation of dispensaries to mini 6 bedded centres.
ESIS dispensaries to be shifted to new modern locations and rent to be paid by ESIC.
ESIC is involved in improving the infrastructure of ESIS Hospital through Hospital
Development Committees.
ESIC is exploring to provide directly through PPP Model for
 Dialysis, Path Labs, X-ray, Dental services.
 ICU, Ultra Sound, Oncology,
 Engagement of Hospital Manager, IT Manager/Assistant for ESIS Hospitals.
ESIC is also providing Manpower on Contract basis (Medical Officers and Paramedics) to tide over the shortage in the ESIS Hospitals
ESIC is requesting the State Governments to establish Subsidiary State
Level Corporation for running Medical Services.
INITIATIVES
At SRO Aurangabad
 Pendency in Benefit Settlement:
 Death Cases
 12 cases we have settled within 3 months and balance we will be settling in the
next 15-20 days.
 Permanent Disablement Cases
 As on date we have 50-60 cases lined up for reference to Medical board.
 SSMC has constituted Medical Board at local level in ESIS Hospital itself.
 Examples of Dependents Benefits being provided:
Insurance No
Name of IP
Contribution Paid
DB Rate Sanctioned
2503090754
Dilip Bornare
Rs 1776/-
Rs 338/-per day (Rs 10140)
2503090522
Rahul Choudahri Rs 200/-
Rs 291/- pd (Rs 8730/-)
2503120637
Yunus Gani Sk
Rs 500/-
Rs. 408/- pd (Rs. 12240/-)
2503057306
Kaka Rakhunde
Rs. 2933/-
Rs 342/- pd (Rs. 10260/-)
THANK YOU ALL