EMPLOYEES’ STATE INSURANCE ACT, 1948

 

Object of the Act

To provide social insurance for the employees.

 

Applicability of the Act & Scheme

Is extended in area-wise to factories employing 10 or more persons and establishments employing 20 or more person.

 

Coverage of employees

Employees drawing gross wages upto Rs.15000/- per month, engaged either directly or thrugh contractor

 

Rate of Contribution of the wages

Employers’ 4.75%

Employees’ 1.75%

 

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 21st 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,

dependents maternity, besides funeral expenses, rehabilitation allowance,

medical benefit to insured person and his or her spouse.

 

WAGES FOR ESI CONTRIBUTIONS

To be deemed as wages

• Basic pay

• Dearness allowance

• House rent allowance

• City compensatory allowance

• 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)

 

NOT to be deemed as wages

• Contribution paid by kthe employer to any pension/provident fund or under ESI Act.

• Sum paid to defray special expenses entailed by the nature of employment 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

• Conveyance Amount towards reimbursement for duty related journey

 

Contribution period

1st April to 30th September.

1st October to 31st March

 

Contribution period

If the person joined insurance employment for the first time, say on 5th January,

his first contribution period will be from 5th January to 31st March and his

corresponding first benefit will be from 5th October to 31st December.

 

Penal Provision

• For contraventions of Provisions of the Act, imprisonment upto 2 years and fine upto Rs.5,000/-.

• For repeated contraventions of the Act, imprisonment upto 5 years and fine upto Rs.25,000/-.