The Employee State Insurance Scheme of India is legislated by the Employees’ State Insurance Act of 1948, the first major legislation on social security for workers in independent India. The intention then was to contribute to socio-economic improvements for workers in the beginnings of industrialization. With the Act, that came into effect on 24th February 1952, India intended to provide social protection to organized workers through statutory provisions.
The ESI Act 1948, encompasses social security benefits such as sickness, maternity, temporary or permanent disablement, occupational disease or death due to employment injury, resulting in loss of wages or earning capacity and one major provision, which is the health insurance benefit for workers and their families.
“It is important to mention here that it blossomed as the first social security scheme in 1944, when the Govt. of the day was still British.The first document on social insurance was “Report on Health Insurance” submitted to the Tripartite Labor Conference…… The Report was acclaimed as a worthy document and forerunner of the social security scheme in India ….”
The Act defines ESI as compulsory, contributory social security scheme including health insurance and applicable to non-seasonal factories employing 10 or more persons.
The Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatres, road-motor transport undertakings, newspaper establishments, establishments engaged in insurance business, non-banking financial companies, port trust, airport authorities, warehousing establishments, private medical institutions, educational institutions and to contract and casual employees of Municipal Corporation/Municipal Bodies . The existing wage limit for coverage under the Act effective from 01/01/2017 is Rs.21,000/- per month [Rs. 25,000/- per month in the case of persons with disability].
The contribution payable to ESIC as payroll deduction and comprised of employer’s and employee’s contributions (w.e.f. 01.07.2019) at a rate of 3.25% and 0.75% respectively. Employees in receipt of a daily average wage up to Rs.137/- are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.
For more information refer to the Corporation’s website: https://www.esic.nic.in/
