Benefits under Employee State Insurance Act, 1948

Employee State Insurance Act

Posted by on September 2, 2016

Employee State Insurance Corporation covers a wide range of benefits to the employees and employers in accordance with the Employees’ State Insurance Act, 1948. Companies that have employed 10 or more workers are covered under the Act. Workers earning less than 15,000/Month are covered under the act.

Employee Benefits:

The act provides the following benefits to the employees covered under the ESIC:

  • Medical Benefit: Full medical benefits to the worker and the family member of the insured with no ceiling on expenditure on the treatment.
  • Sickness Benefits: Cash benefit of 70% of the wages payable to the insured during the period of certified sickness for a maximum 91 days in one year. In order to qualify for this benefit the worker should have contributed for at least 78 days in six months contribution period. The benefits are further extended to 2 years with 80% of the wages payable in case of certain malignant and long term diseases. Another 7 days (for Male) and 14 days (for female) of full wages in case the insured person is undergoing sterilization
  • Maternity Benefit: Full wages for 3 months with possible 1 month extension (on medical advise) provided the insured person has contributed at least 70 days in the past one year
  • Disablement Benefit: In case of disablement due to employment injury 90% of the wages with no time limit.
  • Dependent Benefits: in case of death due occupational hazard or occupational injury, 90% of the wages to be paid to the dependent

Additionally there are benefits related to Funeral Expenses, rehabilitation expenses and unemployment allowances.

Employer Benefits:

  • Employers are not responsible for providing medical allowance, medical reimbursement or taking medical insurance policy for the workers
  • Employers are not required to provide separate sick leaves to the employees covered under ESI
  • Employer’s contribution is a qualified expense under the Income Tax Act.

 

Contribution: As on date, the employee contribution share is 1.75% of the monthly wages and employer contribution is 4.75% of the monthly wages. Employees paid less than 100 per day are exempted from the employee contribution in such cases employer is required to pay the employee share.

Contribution Period:

1 April to 30th September for Benefit period of 1 Jan to 30th June

1 October to 31st March for Benefit period of 1 Jul to 31st Dec

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