Employees' State Insurance in India Explained

Employees' State Insurance in India is a social security and health insurance scheme for Indian workers. It was established in 1948 to provide financial assistance to workers who are injured or become ill due to their job.

The ESI scheme is mandatory for all factories and establishments with 10 or more workers, and it covers a wide range of benefits including medical care, cash compensation, and rehabilitation services.

In India, the ESI scheme is managed by the Employees' State Insurance Corporation, which is a statutory body under the Ministry of Labour and Employment. The ESI Corporation is responsible for implementing the ESI scheme and providing various benefits to insured workers.

The ESI scheme has a vast network of hospitals and dispensaries across India, providing medical care to over 3.5 crore workers and their families.

The Employees' State Insurance (ESI) scheme is a social security scheme offered by the Government of India as per the Employees' State Insurance Act, 1948.

It provides protection to employees against disablement/death due to employment injury, sickness, and maternity. This means that employees can get medical care and other benefits if they're injured or sick due to their job.

The ESI scheme is a self-financing scheme, where both employees and employers make regular monthly contributions to the scheme at a certain percentage of their wages.

Employees must be subscribed to the scheme to get these benefits, so it's essential to understand the terms and conditions of the scheme.

The Employees' State Insurance Corporation (ESIC) is an autonomous organisation under the Ministry of Labour and Employment, Government of India.

It can raise loans and take measures for discharging such loans with the prior sanction of the central government, and it can also acquire both movable and immovable property.

The corporation can set up hospitals either independently or in collaboration with state governments, providing quality medical care to employees.

There are ESIC Medical Colleges, Hospitals, and Dispensaries throughout the country, run directly by the corporation under the Ministry of Labour & Employment.

The ESIC has its offices throughout the country, with jurisdiction further dividing into Regional Offices (ROs) and Sub-Regional Offices (SROs).

The Employee State Insurance (ESI) scheme offers a range of benefits to its subscribers, including medical and cash benefits.

Medical benefits are available to insured employees and their dependent family members, covering doctor consultation, medication, and ambulance services, with no maximum limit on expenditures.

Outpatient medical facilities are available in 1418 ESI dispensaries and through 1,678 registered medical practitioners, while inpatient care is available in 145 ESI hospitals and 42 hospital annexes with a total of 19,387 beds.

The scheme also provides cash benefits, including sickness benefit, maternity benefit, disablement benefit, and dependants benefit, with varying rates and durations.

The scheme offers a sickness benefit of 70% of wages for 91 days, a maternity benefit of 100% of wages for 12 weeks, and a disablement benefit of 90% of wages for temporary and permanent disabilities.

In addition, the scheme provides a funeral expense benefit of up to Rs 10,000 and a dependent benefit of 90% of wages.

The scheme also offers a Rajiv Gandhi Shramik Kalyan Yojana (RGSKY) for unemployment, providing 50% of last wages for up to 1 year.

Here are the benefits and features of the ESI scheme:

The scheme also has a contributory system, with employers contributing 3.25% and employees contributing 0.75% of wages, for a total share of 4%.

The Employees' State Insurance Scheme has come a long way since its inception in 1952, initially implemented in just two industrial centers in Kanpur and Delhi. Today, it's implemented at over 843 centers in 33 States and Union Territories.

The ESI Act now applies to over 7.83 lakhs factories and establishments across the country, benefiting about 2.13 crores insured persons/ family units. This is a significant number, and it's a testament to the scheme's growing reach and impact.

To be eligible for the ESI benefits, employees must have a monthly salary within Rs.21,000. This means that employees working for factories/establishments with ten or more employees drawing wages of up to Rs.21,000 per month are entitled to receive health benefits under the ESI Act.

The ESI Scheme has come a long way since its inception in 1952, starting with just two industrial centers in Kanpur and Delhi.

Today, it's implemented at over 843 centers in 33 States and Union Territories.

The Scheme now applies to over 7.83 lakhs factories and establishments across the country.

This means that about 2.13 crores insured persons or family units benefit from the Scheme.

As of now, the total beneficiary stands at over 8.28 crores.

This significant expansion is a testament to the Scheme's adaptability and growth alongside industrialization.

ESI is applicable to any entity that employs ten or more people, such as shops, hotels, and restaurants that are not engaged in manufacturing, cinemas, road motor transport establishments, newspaper establishments, private educational and medical institutions.

The minimum number of employees required to subscribe for ESI scheme varies with states, such as Maharashtra, Meghalaya, Mizoram, Nagaland, Goa, Chandigarh, and Assam, which is 20. In contrast, some states like Jharkhand, Haryana, Karnataka, Rajasthan, Tripura, West Bengal, Andhra Pradesh, and Delhi require only 10 employees.

In India, Clear serves a vast number of customers, including 1.5+ million individuals, 20,000+ chartered accountants and tax experts, and 10,000+ businesses.

The Employees' State Insurance (ESI) Scheme has made significant efforts to expand its infrastructure over the years. Since its inception in 1952, the ESI Corporation has set up 151 hospitals and 42 hospital annexes for inpatient services.

The ESI Corporation has established a vast network of healthcare facilities, including 1450/188 ESI dispensaries/AYUSH units and 954 panel clinics, which provide primary and out-patient medical services to workers.

These facilities are complemented by five Occupational Disease Centers, one each located in Mumbai, New Delhi, Kolkata, Chennai, and Indore, which focus on the early detection and treatment of occupational diseases prevalent in hazardous industries.

The ESI Scheme has been expanding its infrastructure to meet the growing needs of its beneficiaries. The corporation has set up 151 hospitals and 42 hospital annexes for inpatient services.

These facilities provide primary and out-patient medical services through a network of about 1450/188 ESI dispensaries/AYUSH units, and 954 panel clinics. This extensive network ensures that workers have access to quality healthcare services.

The corporation has also established five Occupational Disease Centers in major cities like Mumbai, New Delhi, Kolkata, Chennai, and Indore. These centers focus on early detection and treatment of occupational diseases prevalent in hazardous industries.

A total of 628/185 Branch Offices/Pay Offices operate under the corporation, facilitating the payment of Cash Benefits to beneficiaries. These offices are supervised by 62 Regional/Sub-Regional and Divisional offices.

Here's a breakdown of the ESI Scheme's infrastructure:

The Employee State Insurance Scheme is a multidimensional societal security scheme that provides socio-economic security to people employed in the organised sector and their dependent members.

This scheme offers financial assistance during medical emergencies due to occupational hazards, sickness, and maternity.

The corporate body responsible for managing this integrated program is the Employee State Insurance Corporation (ESIC).

Every employer must guarantee a new employee's enrolment under this program as per the Employees State Insurance Act.

The Employee State Insurance Scheme is designed to provide comprehensive coverage to employees and their families, ensuring their financial security during times of need.

The Builders' Association of India (BAI) has been at the center of a significant case regarding the applicability of the Employees' State Insurance (ESI) to construction workers. The Supreme Court of India has stayed the applicability of the ESI to construction workers in a case involving the BAI.

This case has important implications for the construction industry in India, where many workers are employed on a daily wage basis. The ESI scheme provides health insurance and other benefits to workers, but the BAI argued that construction workers should not be covered under this scheme.

The Supreme Court's decision has been a major relief for the BAI and the construction industry as a whole. The court's ruling has clarified the scope of the ESI scheme and provided much-needed clarity for employers and workers in the industry.

In another case, the Supreme Court of India clarified that conveyance or travelling allowance should not be considered as wages under Section 2(22) of the ESI. This ruling has significant implications for employers who provide transportation to their employees as part of their employment benefits.