The Employees’ State Insurance Act, 1948 is a pioneering social welfare legislation designed to provide financial and medical assistance to employees in times of distress. It ensures protection from uncertainties such as sickness, maternity, disability, and death due to employment injury. The Act applies to factories and establishments employing 10 or more persons and aims to provide comprehensive coverage to workers and their families.
Objective of the Employees’ State Insurance Act, 1948
The Employees’ State Insurance Act, 1948 aims to provide a variety of benefits to workers, ensuring their well-being and that of their dependents. The Act introduces a social security scheme that guarantees timely medical care, cash benefits during illness, maternity leave, or employment injury, and even pensions in cases of death or permanent disability. By ensuring workers’ health and safety, it indirectly contributes to national productivity and industrial peace.
Eligibility and Coverage
The Act applies to:
- Non-seasonal factories using power and employing 10 or more persons.
- Shops, hotels, restaurants, cinemas, road transport, and newspaper establishments employing 10 or more persons.
- Medical and educational institutions (private or public) under certain conditions.
Employees drawing wages up to ₹21,000 per month (₹25,000 for persons with disabilities) are covered. The scheme is financed through contributions from both employer and employee.
Key Benefits under the Employees’ State Insurance Act, 1948
Medical Benefit
The insured person and their dependents receive full medical care from day one of employment. This includes:
- Outpatient and inpatient services
- Specialist consultation
- Diagnostic services
- Free medicines
- Super-specialty care in tie-up hospitals
No limit exists on the expenditure for medical treatment for insured persons or their family members.
Sickness Benefit
This benefit is a cash compensation for loss of wages during certified sickness. Under the Employees’ State Insurance Act, 1948, an insured worker is entitled to:
- 70% of wages (in cash) for a maximum of 91 days in a year.
- The benefit applies if the worker has contributed for at least 78 days in the contribution period.
There are special provisions like:
- Extended Sickness Benefit: For long-term diseases (up to 2 years).
- Enhanced Sickness Benefit: For undergoing sterilization (100% of wages for specific days).
Maternity Benefit
Women insured under the Act receive full wage compensation for the period of maternity leave. The Employees’ State Insurance Act, 1948 grants:
- 100% of the average daily wages for 26 weeks.
- Can be extended to 30 weeks in certain conditions.
- Covers confinement, miscarriage, sickness due to pregnancy, and adoption-related maternity.
Disablement Benefit
This is applicable when an insured person suffers temporary or permanent disablement due to an employment injury:
- Temporary Disablement: 90% of wage paid till recovery.
- Permanent Disablement: Compensation based on the extent of loss of earning capacity as certified by a medical board.
The Employees’ State Insurance Act, 1948 ensures lifelong pension in cases of total permanent disability.
Dependants’ Benefit
If an insured employee dies due to employment injury, his dependents receive:
- Monthly pension equivalent to 90% of the deceased’s wage.
- Distributed among widow, children, and other eligible dependents.
This benefit extends social security to the bereaved family under the Employees’ State Insurance Act, 1948.
Funeral Expenses
A fixed amount (currently ₹15,000) is paid towards funeral expenses of a deceased insured person. The payment is made to the eldest surviving family member or the person who performs the funeral.
Confinement Expenses
If the insured woman or an insured man’s wife delivers a child at a place where ESIC medical facilities are not available, a confinement benefit is provided.
Vocational Rehabilitation
This is provided to permanently disabled employees for skill training and job placement under the guidance of vocational experts. The Employees’ State Insurance Act, 1948 emphasizes rehabilitation to help disabled employees return to the workforce.
Unemployment Allowance (Rajiv Gandhi Shramik Kalyan Yojana)
The Act includes provisions for unemployment benefits in the form of:
- Unemployment allowance up to 24 months.
- Medical care during unemployment.
- Skill upgrading training.
These benefits are offered to insured persons who lose employment involuntarily due to retrenchment or closure of the factory.
Role of ESI Corporation
The Employees’ State Insurance Corporation (ESIC) is the central body that administers the scheme. It operates hospitals, dispensaries, and dispensaries in collaboration with the state governments. It also frames rules and guidelines to expand or improve services under the Act.
Recent Amendments and Digitalization
The Employees’ State Insurance Act, 1948 has undergone multiple changes to expand its coverage and improve ease of access. Digital health cards, online portals for registration, and real-time claim processing have improved transparency and delivery.
Conclusion
The Employees’ State Insurance Act, 1948 stands as a cornerstone of India’s social security system. By offering multiple benefits to workers and their dependents, it helps maintain a safety net against life’s uncertainties. The Act promotes a healthy workforce, improves labor efficiency, and nurtures a culture of compassion and care in industrial relations.
