Employees State Insurance Act, 1948

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## **Unit 4: Employees State Insurance Act, 1948 – Broad Answer**

The **Employees State Insurance Act, 1948** was enacted by the Indian Parliament to provide social security to workers in case of sickness, maternity, injury, or death due to employment. It represents a major step toward establishing a comprehensive social insurance system for industrial workers in India.

### **1. Objectives of the Act**

The main objective of the ESI Act is to ensure workers are protected against financial distress arising from health-related issues. It aims to provide:

- Medical care to workers and their families.

- Cash benefits during sickness and maternity.

- Compensation in case of disablement or death due to employment injury.

- A mechanism for resolving disputes related to benefits.

### **2. Applicability of the Act**

The Act applies to:

- All factories (excluding seasonal ones) employing 10 or more persons.

- Shops, hotels, cinemas, and other notified establishments.

- The wage ceiling for coverage is ₹21,000 per month (subject to updates).

It does **not apply** to mines, railway running sheds, or armed forces.

### **3. Contributions under the Act**

- **Employer’s Contribution:** 3.25% of the employee’s wages.

- **Employee’s Contribution:** 0.75% of wages.

- The State Government contributes a fixed share towards medical expenses.

These contributions are deposited in the ESI Fund managed by the Employees' State Insurance Corporation (ESIC).

### **4. Benefits Provided under the Act**

The Act provides a wide range of benefits to insured persons and their dependents:

#### a) Medical Benefit

- Free medical care is provided to insured employees and their families from day one of employment.

#### b) Sickness Benefit

- Cash compensation at 70% of wages is provided during periods of certified sickness for up to 91 days in a year.

#### c) Maternity Benefit

- Women employees are entitled to maternity leave with full wages for 26 weeks (extendable in some cases).

#### d) Disablement Benefit

- Temporary Disablement: Full wages are paid during the period of disablement.

- Permanent Disablement: A pension is paid based on the extent of loss of earning capacity.

#### e) Dependents Benefit

- In case of death due to employment injury, monthly pensions are paid to the dependents (spouse, children, parents).

#### f) Other Benefits

- Funeral expenses (currently up to ₹15,000).

- Rehabilitation allowances and vocational training for disabled workers.

### **5. Administrative Machinery**

The Act is administered by the **Employees' State Insurance Corporation (ESIC)**. The key bodies are:

- **ESIC:** Central body that manages the ESI fund and overall functioning.

- **Standing Committee:** Executive body that implements decisions.

- **Medical Benefit Council:** Advises on medical care.

- **Local Committees:** Assist in local implementation and resolving grievances.

### **6. Adjudication of Disputes**

Disputes relating to claims, benefits, and contributions under the Act are handled by **Employees’ Insurance Courts (ESI Courts)**. Civil courts have no jurisdiction in such matters. The decisions of ESI Courts are binding and can be appealed in High Courts on substantial questions of law.

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### **Conclusion**

The Employees State Insurance Act, 1948, is a cornerstone of India's labour welfare legislation. By ensuring medical and financial support to employees and their families during difficult times, the Act not only secures workers’ lives but also boosts morale and productivity in the workforce.