Employees’ State Insurance Scheme of India, is a multidimensional social security system tailored to provide socio-economic protection to worker population and their dependants covered under the scheme.

Employee State Insurance (ESI) is the first self-financing health insurance cum social security scheme launched for the working class (with monthly income below Rs.21000/-) in Independent India. It refers to a social security provision made by the Government of India under the Employees' State Insurance Act, 1948 (ESI Act) to counterbalance or negate the physical or financial distress resulting from certain health related eventualities that the workers are generally exposed to, such as sickness, maternity, temporary or permanent disablement, occupational disease or death due to employment injury, resulting in loss of wages or earning capacity-total or partial.

The ESI Scheme is financed by contributions from employers and employees. The rate of contribution by employer is 4.75% of the wages payable to employees. The employees’ contribution is at the rate of 1.75% of the wages payable to an employee.

An interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fixed percentage of the workers’ wages, whereas, they are provided social security benefits according to individual needs without distinction.

Background

The promulgation of Employees' State Insurance Act, 1948 (ESI Act) by the Parliament was the first major legislation on social Security for workers in independent India. The scheme was inaugurated in Kanpur on 24 February 1952 (which is now celebrated as ESIC Day) by the then Prime Minister Pandit Jawahar Lal Nehru, with a simultaneous launch in Delhi. The initial coverage for both the centres was 1, 20,000 employees. The first prime Minister was the first honorary insured person of the Scheme and the declaration form bearing his signature is kept at ESI Corporation. The predecessor of this scheme was launched during British days in 1944.

Applicability and Coverage

The ESI Scheme applies to factories (including government factories) and other establishments viz. Road Transport, Hotels, Restaurants, Cinemas, Newspaper, Shops, Educational/Medical Institutions wherein 10 or more persons are employed. However, in some States threshold limit for coverage of establishments is still 20. ESI Scheme will not apply to a factory or establishment belonging to or under the control of the Government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.

ESIC Benefits
  • MEDICAL BENEFITS: ESIC TAKE CARE OF YOUR MEDICAL NEEDS. ESIC provides reasonable Medical Care for self and family from day one of entering into insurable employment.
  • SICKNESS BENEFIT: SICK LEAVE IS NOT LEAVE OF EARNING. ESIC provides 70% of average daily wages in cash during medical leave, upto 91 days in two consecutive benefit periods
  • MATERNITY BENEFIT: WELCOME YOUR BABY WELCOME THE BENEFITS. ESIC provides 100% of average daily wages in cash up to 12 weeks in confinement and 6 week in case of miscarriage, during maternity leave. The during is being proposed to be increased upto 26 weeks.
  • DISABLEMENT BENEFIT: DISABILITY DOESN'T MEAN INABILITY TO EARN. ESIC provides continuous monthly payment till injury lasts for partial disablement and for whole life for permanent total disablement.
  • DEPENDANTS' BENEFIT: THOSE WHO DEPEND ON YOU ALSO HAVE US TO DEPEND ON. ESIC provides monthly pension shareable in fixed proportions among dependants in case of death due to employment injury.
  • UN-EMPLOYMENT ALLOWANCE: LOSS OF JOB DOESN'T MEAN LOSS OF INCOME. ESIC Providers monthly cash allowance in case of involuntary loss of employment or permanent invalidity due to non-employment injury for a duration of maximum 24 months.