Employees’ State Insurance Scheme of India is an integrated social security scheme tailored to provide social protection to workers and their dependants, in the organised sector, in contingencies, such as, sickness, maternity and disablement or death due to an employment injury or occupational hazard.
The ESI Act, (1948) applies to following categories of factories and establishments in the implemented areas:-
Non-seasonal factories employing ten(10) or more persons and establishments employing twenty (20) or more persons.
The “appropriate Government” (State or Central) is empowered to extend the provisions of the ESI Act to any class of establishments, industrial, commercial or agricultural or otherwise. Under these enabling provisions, the State Govts have extended the provisions of the ESI Act to certain specified class of establishments, such as, shops, hotels, restaurants, cinemas, preview theatres, road-motor transport undertakings and newspaper establishments employing 20 or more persons.
The ESI Scheme is mainly financed by contributions from employees and employers, as a fixed percentage of wages. The employees contribute @1.75% of their wage while the employers contribute 4.75% of the total wages of the covered employees. Employees of covered units and establishments drawing wages upto Rs. 15000/- per month (excluding overtime)(w.e.f.01.05.2010) come under the purview of the scheme for social security benefits. However, employees’ earning upto Rs. 100/- a day as wages are exempted from payment of their part of contribution.The State Govts bear one-eighth share of expenditure on Medical Benefit while the Corporation meets 7/8th share of expenditure thereon.
Employees covered under the scheme are entitled to medical treatment and attendance for self and dependants. They are also entitled to cash benefits in the event of specified contingencies resulting in loss of wages or earning capacity. The insured women are entitled to maternity benefit for confinement. Where death of an insured employee occurs due to employment injury, the dependants are entitled to family pension.