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Insurance Act,1948
The ESI Act applies to non-seasonal factories or manufacturing units, shops &
establishments, Private Medical & Educational Institutions employing 10 or more
persons. Under the enabling provisions of the Act, a factory or establishment, located in
a geographical area, notified for implementation of the scheme falls in the purview in
the Act. Employees of the aforesaid categories of factories and establishments and
drawing wages o upto Rs.15,000/- a month are entitled to health Insurance cover under
the ESI Act. The wage ceiling for purpose of coverage is revised from time to time to
keep pace with rising cost living and subsequent wage hikes. The present ceiling of
Rs.15,000/- has been effective from 1.5.2010. However, this is a mere guidance and
details may be seen from ESI Act 1948, as amended.
Applicability
The Act applies to all factories (including Government factories but excluding seasonal
factories)
employing ten or more persons and carrying on a manufacturing process with the
aid of power or
Contributions
The employer is required to contribute at the rate of 4.75% of the wages paid/payable
in respect of every wage period. The employees are also required to contribute at the
rate of 1.75% of their wages except when the "average daily wages in a wage period"
are equal to or less than Rs. 40. It is the principal employers responsibility to deposit
his own as well as employees contributions in respect of all employees including the
contract Labour, into the E.S.I. Account. Non-availability of funds cannot be a ground for
non-payment of contributions under the Act. There is no provision to waive the
contribution, damages and interest.
The employer should get his factory or establishments registered with the E.S.I.
Corporation within 15 days after the Act becoming applicable to it, and obtain the
Benefits
The Act envisages six types of benefits to insured persons and /or their family. None of
these benefits are transferable, attachable or assignable. They are also not commutable.
SICKNESS BENEFIT
MATERNITY BENEFIT
DISABLEMENT BENEFIT
DEPENDANTS BENEFIT
MEDICAL BENEFITS
FUNERAL BENEFITS
Modes of recovery
Inspectors appointed under the Act have the power to require the principal employer to
furnish such information as may be required and may examine the books of accounts
and other documents relating to the employment of persons and payment of wages etc,
and shall where no returns, registers or records are maintained or if the inspector is
prevented from exercising his functions then the corporation may on the basis of
information available with it determine the amount of contribution payable. Authorised
officer shall include Director General, Insurance commissioner, Joint Insurance
Commissioner, Regional Director. In respect of arrears due under the Act, the authorised
officer may issue certificate to the recovery officer who shall proceed to recover the
amount specified therein and may resort to any one of the modes.
Any dispute arising under the Act shall be decided by the Employees Insurance Court
and not by a Civil Court. Prosecution under this Act shall not be instituted except by or
with the previous sanction of the Insurance Commissioner or of such other officer of the
corporation as may be authorised. No court inferior to that of a Metropolitan Magistrate
or Judicial Magistrate of the First Class shall try any offence under this Act.
Offences by companies
If the person committing an offence under this Act is a company, every person, who at
the time the offence was committed was in charge of, and was responsible to, the
company for the conduct of the business of the company, as well as the company, shall
be deemed to be guilty of the offence and shall be liable to be proceeded against and
punished accordingly. Such person shall not be liable to any punishment, if he proves
that the offence was committed without his knowledge or that he exercised all due
diligence to prevent the commission of such offence. Where an offence under this Act
has been committed with the consent or connivance of, or is attributable to, any neglect
on the part of, any director or manager, secretary or other officer of the company, such
director, manager, secretary or other officer shall be deemed to be guilty of that offence
and shall be liable to be proceeded against and punished accordingly.