Relevance: GS Prelims – Polity & Governance / Social Security / Labour & Employment
About Employees’ State Insurance Act, 1948
- The Employees’ State Insurance Act, 1948 (ESI Act) is a major social security legislation enacted to provide social insurance benefits to eligible employees and their dependants.
- It provides protection against contingencies such as:
- Sickness
- Maternity
- Employment injury
- Disablement
- Death due to employment injury
- The scheme is administered by the Employees’ State Insurance Corporation (ESIC) under the administrative control of the Ministry of Labour & Employment.
- The ESI framework combines medical care with cash benefits during specified contingencies.
About Employees’ State Insurance Corporation (ESIC)
- ESIC is a statutory corporation established under the ESI Act, 1948.
- It administers the Employees’ State Insurance Scheme (ESIS).
- It is responsible for:
- Providing medical benefits to insured persons and their families.
- Administering cash benefits under the scheme.
- Managing ESI hospitals, dispensaries and other medical infrastructure.
- Implementing social security provisions for covered employees.
Coverage under ESI
- The ESI Scheme generally applies to factories and establishments covered under the Act, subject to the prescribed conditions.
- Coverage is determined by factors such as:
- Nature of establishment.
- Number of employees.
- Wage ceiling prescribed for coverage.
- Notifications issued by the appropriate government.
- Persons with disabilities are subject to a higher wage ceiling for coverage under the scheme.
Major Benefits under ESI Scheme
- Medical Benefit – Medical care, medicines, specialist consultation and hospitalisation for insured persons and families.
- Sickness Benefit – Cash compensation during certified sickness, subject to eligibility.
- Maternity Benefit – Cash benefits to insured women during maternity and related contingencies.
- Disablement Benefit
- Temporary: For temporary disablement due to employment injury.
- Permanent: For permanent loss of earning capacity due to employment injury.
- Dependants’ Benefit – Periodic payments to eligible dependants on death due to employment injury.
- Funeral Expenses – Financial assistance for funeral expenses, subject to conditions.
- Rehabilitation Benefits – Rehabilitation support in eligible cases.
Financing of ESI Scheme
- The ESI Scheme is based on the principle of contributory social insurance.
- Contributions are made by:
- Employer
- Employee
- The contribution rates are prescribed under the ESI framework and may be revised by the Government.
- The contributions from the financial foundation for providing medical and cash benefits.
ESI Act and Social Security Code
- The Code on Social Security, 2020 seeks to consolidate and amend laws relating to social security.
- It subsumes several existing labour laws, including the Employees’ State Insurance Act, 1948, as part of the broader labour-law reform framework.
- The ESI framework is therefore important for understanding India’s transition towards a unified social security architecture.
Conclusion
The Employees’ State Insurance Act, 1948 is a landmark social security legislation that provides a comprehensive system of medical care and cash benefits to insured employees and their families against sickness, maternity, employment injury, disablement and death arising from employment injury.
| This concept has been elaborately discussed in the following Article- ATAL BEEMIT VYAKTI KALYAN YOJANA (ABVKY) |