State Insurance Act, 1948 (ESI Act)
provides for health care and cash
benefit payments in the case of sickness, maternity and employment injury.
The Act applies to all non-seasonal factories run with power and employing
10 or more persons and to those factories which run without power and
employing 20 or more persons. The appropriate Government may after notification
in the Official Gazette, extend the provision of the Act to any other
establishment or class of establishments, industrial, commercial, agriculture
Under the Act, cash benefits are administered by the Central
Government through the Employees State Insurance Corporation (ESIC), whereas
the State Governments and Union Territory Administrations are administering
State Insurance Corporation (ESIC) is the premier social security
organization in the country. It is the highest policy making and decision
taking authority under the ESI Act and oversees the functioning of the
under the Act. The corporation comprises members representing Central
and State Governments, employers, employees, Parliament and the medical
profession. Union Minister of Labour functions as the Chairman of the
Corporation. A Standing
Committee constituted from among the members of the Corporation acts
as the Executive Body for the administration of the Scheme.
The basic provisions of the Act are :-
- Every factory or establishment to which this Act applies
shall be registered
within such time and in such manner as may be specified in the regulations
made in this behalf.
- It provided for an integrated need based social insurance
scheme that would protect the interest of workers in contingencies such
as sickness, maternity, temporary or permanent physical disablement,
death due to employment injury resulting in loss
of wages or earning capacity.
- It also provided for six
social security benefits:-
- Medical Benefit
- Sickness Benefit (SB)
- Maternity Benefit (MB)
- Disablement Benefit
- Dependants' Benefit(DB)
- Funeral Expenses
- The Central Government may, by notification
in the Official Gazette, establish a Corporation to be known
as the 'Employees' State Insurance Corporation' for the administration
of the scheme of Employees' State Insurance in accordance with the provisions
of the Act.
- The Corporation may, in addition to the scheme of benefits
specified in this Act, promote measures for the improvement of the health
and welfare of insured persons and for the rehabilitation and re-employment
of insured persons who have been disabled or injured and may incur in
respect of such measures expenditure from the funds of the Corporation
within such limits as may be prescribed by the Central Government.
- The contribution
payable under this Act in respect of an employee shall comprise contribution
payable by the employer and contribution payable by the employee and
shall be paid to the Corporation. The contributions shall be paid at
such rates as may be prescribed by the Central Government.
- All contributions paid under this act and all other moneys
received on behalf of the Corporation shall be paid into a fund called
the 'Employees' State Insurance Fund' which shall be held and administered
by the Corporation for the purposes of this Act.
- Whoever, for the purpose of causing any increase in payment
or benefit under this Act, or for the purpose of causing any payment
or benefit to be made where no payment or benefit is authorised by or
under this Act, or for the purpose of avoiding any payment to be made
by himself under this Act or enabling any other person to avoid any
such payment, knowingly makes or causes to be made any false statement
or false representation, shall be punishable with imprisonment or with
fine or with both.
- If the person committing an offence under this Act is
a company, every person, who at the time the offence was committed was
in charge of, and was responsible to, the company for the conduct of
the business of the company, as well as the company, shall be deemed
to be guilty of the offence and shall be liable to be proceeded against
and punished accordingly.