Employees’ State Insurance Corporation

A report by
Ananya Singh (44, 224055), Aryan Agarwal (43, 224054), Jiyaa Shah (42, 224053), Karen J.
Kurien (34, 224045) and Natasha Raisinghani (49, 224063)
 Introduction
The Employees’ State Insurance (ESI) Scheme is a multi-dimensional integrated measure of
social insurance and security embodied in the Employees’ State Insurance act and is designed
to accomplish the task of providing socio-economic protection to the ‘employees’ as defined
in the Employees’ State Insurance act, 1948 against the impact of contingencies of sickness,
maternity, disablement, and death due to employment injury and to provide medical care to
insured persons and their families.
Important Definitions
In this Act, unless there is anything repugnant in the subject or context,
(1) Confinement means labour resulting in the issue of a living child or labour after twenty-
six weeks of pregnancy resulting in the issue of a child whether alive or dead;

(2) Contribution means the sum of money payable to the Corporation by the principal
employer in respect of an employee and includes any amount payable by or on behalf of
the employee in accordance with the provisions of this Act;

(3) Corporation means the Employees' State Insurance Corporation set up under this Act;

(4) Dependant means any of the following relatives of a deceased insured person, namely:

(i) a widow, a legitimate or adopted son who has not attained the age of twenty-
five years, an unmarried legitimate or adopted daughter;
a) a widowed mother;
(ii) if wholly dependent on the earnings of the insured person at the time of his
death, a legitimate or adopted son or daughter who has attained the age of 15
[twenty-five years] and is infirm;

(iii) if wholly or in part dependant on the earnings of the insured person at the
time of his death,
a) a parent other than a widowed mother,
b) a minor illegitimate son, an unmarried illegitimate daughter or a daughter
legitimate or adopted or illegitimate if married and a minor or if widowed
and a minor,
c) a minor brother or an unmarried sister or a widowed sister if a minor,
d) a widowed daughter-in-law,
e) a minor child of a pre-deceased son,
f) a minor child of a pre-deceased daughter where no parent of the child is
alive, or
g) a paternal grand-parent if no parent of the insured person is alive;

(5) Employee means any person employed for wages in or in connection with the work of a
factory or establishment to which this Act applies and
 i. who is directly employed by the principal employer, on any work of, or
incidental or preliminary to or connected with the work of, the factory
or establishment, whether such work is done by the employee in the
factory or establishment or elsewhere; or
ii. who is employed by or through an immediate employer, on the
premises of the factory or establishment or under the supervision of the
principal employer or his agent on work which is ordinarily part of the
work of the factory or establishment or which is preliminary to the
work carried on in or incidental to the purpose of the factory or
establishment; or
iii. whose services are temporarily lent or let on hire to the principal
employer by the person with whom the person whose services are so
lent or let on hire has entered into a contract of service;
[and includes any person employed for wages on any work connected
with the administration of the factory or establishment or any part,
department or branch thereof or with the purchase of raw materials for,
or the distribution or sale of the products of, the factory or
establishment] [or any person engaged as apprentice, not being an
apprentice engaged under the Apprentices Act, 1961 (52 of 1961),
[and includes such person engaged as apprentice whose training period
is extended to any length of time] but does not include:
a. any member of [the Indian] naval, military or air forces;
or
b. any person so employed whose wages (excluding
remuneration for overtime work) exceed [such wages as
may be prescribed by the Central Government] a month:
Provided that an employee whose wages (excluding
remuneration for overtime work) exceed [such wages as
may be prescribed by the Central Government] at any
time after (and not before) the beginning of the
contribution period, shall continue to be an employee
until the end of that period;

(6) Exempted employee means an employee who is not liable under this Act to pay the
employee's contribution;

(7) Family means all or any of the following relatives of an insured person, namely:
(i) a spouse;
(ii) a minor legitimate or adopted child dependent upon the insured person;
(iii) a child who is wholly dependent on the earnings of the insured person and
who is
a) receiving education, till he or she attains the age of twenty-one years,
b) an unmarried daughter;
(iv) a child who is infirm by reason of any physical or mental abnormality or
injury and is wholly dependent on the earnings of the insured person, so long
as the infirmity continues;
(v) dependant parents, whose income from all sources does not exceed such
income as may be prescribed by the Central Government;
 (vi) in case the insured person is unmarried and his or her parents are not alive, a
minor brother or sister wholly dependent upon the earnings of the insured
person;

(8) Factory means any premises including the precincts thereof whereon ten or more persons
are employed or were employed on any day of the preceding twelve months, and in any
part of which a manufacturing process is being carried on or is ordinarily so carried on,
but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952)
or a railway running shed;

(9) Immediate employer, in relation to employees employed by or through him, means a

person who has undertaken the execution, on the premises of a factory or an
establishment to which this Act applies or under the supervision of the principal
employer or his agent, of the whole or any part of any work which is ordinarily part of
the work of the factory or establishment of the principal employer or is preliminary to the
work carried on in, or incidental to the purpose of, any such factory or establishment, and
includes a person by whom the services of an employee who has entered into a contract
of service with him are temporarily lent or let on hire to the principal employer [and
includes a contractor];

(10) Insurable employment means an employment in a factory or establishment to which

this Act applies;

(11) Insured person means a person who is or was an employee in respect of whom
contributions are or were payable under this Act and who is by reason thereof, entitled to
any of the benefits provided by this Act;

(12) Managing agent means any person appointed or acting as the representative of another
person for the purpose of carrying on such other person's trade or business, but does not
include an individual manager subordinate to an employer;

(13) Miscarriage means expulsion of the contents of a pregnant uterus at any period prior
to or during the twenty-sixth week of pregnancy but does not include any miscarriage,
the causing of which is punishable under the Indian Penal Code (45 of 1860);

(14) Principal employer means

(i) in a factory, the owner or occupier of the factory and includes the managing
agent of such owner or occupier, the legal representative of a deceased owner
or occupier, and where a person has been named as the manager of the factory
under [the Factories Act, 1948 (63 of 1948)], the person so named;
(ii) in any establishment under the control of any department of any Government
in India, the authority appointed by such Government in this behalf or where
no authority is so appointed, the head of the Department;
(iii) in any other establishment, any person responsible for the supervision and
control of the establishment;

(15) Seasonal factory means a factory which is exclusively engaged in one or more of the
following manufacturing processes, namely, cotton ginning, cotton or jute pressing,
decortication of groundnuts, the manufacture of coffee, indigo, lac, rubber, sugar
 (including gur) or tea or any manufacturing process which is incidental to or connected
with any of the aforesaid processes and includes a factory which is engaged for a period
not exceeding seven months in a year:
(a) in any process of blending, packing or repacking of tea or coffee; or
(b) in such other manufacturing process as the Central Government may, by
notification in the Official Gazette, specify;

(16) Sickness means a condition which medical treatment and attendance and necessitates
abstention from work on medical grounds;

(17) Wages means all remuneration paid or payable in cash to an employee, if the terms of
the contract of employment, express or implied, were fulfilled and includes [any payment
to an employee in respect of any period of authorised leave, lock-out, strike which is not
illegal or lay-off and] other additional remuneration, if any, [paid at intervals not
exceeding two months], but does not include:
(a) any contribution paid by the employer to any pension fund or provident fund,
or under this Act;
(b) any travelling allowance or the value of any travelling concession;
(c) any sum paid to the person employed to defray special expenses entailed on
him by the nature of his employment; or
(d) any gratuity payable on discharge;

(18) Wage period in relation to an employee means the period in respect of which wages
are ordinarily payable to him whether in terms of the contract of employment, express or
implied or otherwise;

(19) All other words and expressions used but not defined in this Act and defined in the
Industrial Disputes Act, 1947 (14 of 1947), shall have the meanings respectively
assigned to them in that Act.]
(i) a widow
(ii) a minor
(iii) legitimate or adopted son
(iv) an unmarried legitimate or adopted daughter;
(v) dependent parents.

(20) Factory means any premises including the precincts thereof

(i) whereon ten or more persons are employed or were employed for wages on
any day of the preceding twelve months, and in any part of which a
manufacturing process is being carried on with the aid of power or is
ordinarily so carried on, or
(ii) whereon twenty or more persons are employed or were employed for wages
on any day of the preceding twelve months, and in any part of which a
manufacturing process is being carried on without the aid of power or is
ordinarily so carried on, but does not include a mine subject to the operation
of the Mines Act, 1952 (35 of 1952) or a railway running shed;’. Section 2 in
The Employees' State Insurance Act, 1948.
 What is ESIC?
The ESI Scheme is administered by a statutory corporate body called the Employee’ State
Insurance Corporation (ESIC), which has members representing Employers, Employees, the
Central Government, State Government, Medical Professionals, and the Honourable
Members of Parliament.
ESIC is the only Social Security Organisation in the country which covers most of the
exigencies-that are provided in the list of The International Labour Organization-which are:
 Sickness
 Medical care of the worker
 Maternity
 Unemployment
 Work injury
 Death of worker
 Invalidity
 Widowhood
Each social security payment made under the ESI Scheme helps the insured person (IP)
without putting any extra burden on his or her savings or earrings, during emergent medical
and other contingencies.
The other bodies under ESIC are:
On a National Level:
 The Standing Committee, which is a representative body of the ESIC for
administering its affairs.
 The Medical Benefit Council, which is a specialized body that advises the ESIC on
the administration of Medical Benefits.
On a Regional Level:
 Regional Boards
 Local Committees
These have been constituted to review the functioning of the scheme and make suggestions
for its improvement.
 Hospital Development Committees, set up for improvement of hospital
 State Executive Committee, for monitoring the performance of ESIS Hospitals and
Dispensaries in a given State or Union Territory.
Funding
The ESI Scheme is self-financed scheme. It is financed by:
 Contributions from employers: the rate of contribution by employer is 3.25% of the
wages payable to employees.
 Contribution from employees: the rate of contribution by employees is at the rate of
0.75% of the wages payable to him or her. However, employees, earning up to
 ₹176 a day as daily wages, are exempted from payment of their share of
contribution.
 The State Governments bear 1/8th share of the cost of Medical Benefit.
Contribution period:
An employer is liable to pay his contribution in respect of every employee and deduct
employee’s contribution from the wages bill and pay these contributions at the above
specified rates to the Corporation within 15 days of the last day of the Calendar month in
which the contributions fall due. The Corporation has authorized designated branches of the
State Bank of India and some other banks to receive the payments on its behalf.
There are two contribution periods, each of a six-month duration and two corresponding
benefit periods also of a six-month duration as under:
Contribution Period Corresponding Cash Benefit Period
1st April to 30th September 1st January of the following year to 30th June
1st October to 31st March 1st July to 31st December of the year
following

How does ESIC deal with employers who do not comply/try to work around the system?
The Social-Security Officer or The Branch Manager, they have the responsibility of visiting
the employer's premises, and get the accounts, and the records of Balance Sheet, Profit and
Loss Statements, Salary Records, Ledgers. This must then be thoroughly checked so as to be
confronted with every labour component that was utilised in working of the work premises.
For example, even if the factory owner calls third party labours for painting the walls of the
premises, he/she has to provide ESIC contribution for them. This labour must be recorded by
preserving the vouchers associated with the work. For this there exists a body as well, known
as "Central Analysis Intelligence Unit" run by Labour Ministry. They have the records of
contributions paid by the employers, and they get to know about the employers who have
defaulted their respective payments and also the employers who have stark irregularities in
their contributions. The headquarters office then marks the employers for inspection, and
ping the Social Security Officer of that respective area, who then has to conduct an
inspection. Then the loopholes are found.
The Insurance office which we visited in Parel, had its jurisdiction area from Ghatkopar to
Bandra, and they thus have all the files of employers located within their jurisdiction. Now,
these files are routinely reviewed, thoroughly, and this process reveals the defaulters who
haven't paid contributions. These contributions are to be paid within their deadlines, which is
set to be 15th of the next month. That is, the contributions of January should be paid by the
15th of February, or there is an interest component, + a damages component to be paid as
penalty. These damages range from a 5% of the contributions to 100%, depending upon the
period of default. The interest component to be paid is 12.5% P.A., and is levied even if the
payment is made 2 days after the due date.

Implementation
The scheme is implemented in phases in different parts of the country through Gazette
notification after making the infrastructure available towards dispensation of medical as well
as other benefits.
The implementation of the scheme is done in areas that are industrial clusters through branch
offices. These offices exist for the convenience of the employees and to serve them at their
doorstep instead of them having to travel to other far away offices.
Factories where 10 or more persons are employed attract coverage under the ESI Act.
Further, according to the notification issued by the appropriate Government (Central or
State), the following establishments employing 10 or more persons attract ESI coverage:
 Shops
 Hotels or restaurants not having any manufacturing activity, but only engaged in
'sales'
 Cinemas including preview theatres
 Road Motor Transport Establishments
 Newspaper Establishments
 Private Educational Institutions, those run by individuals, trustees, societies or other
organizations
 Medical Institutions, including Corporate, Joint Sector, trust, charitable, and private
ownership hospitals, nursing homes, diagnostic centres, pathological labs
In some states coverage is still for 20 or more persons employed under section 1(5) and a
few State Governments have not extended the scheme to Medical and Educational
Institutions.
Development
With the world making advancements in and moving towards technology and the digital
world, ESIC is trying to keep up with the changes and get to an ‘E-Office’ kind of setting. To
do this, they have carried out various projects like Project Panchdeep and Project Pehchan. In
the latter project, they stored records and biometrics of all employees electronically on their
system.
What is ESIS?
Health is a subject of state i.e., health projects cannot be carried out by the Central
Government unless they get the consent to do so by the State Government.
What happens if the aforementioned consent is not given?
 ESIC keeps 1/8th of the money that they generate in that state and give 7/8 th of this
money to the State Government
 The state decides how they want to provide for the healthcare facilities.
This is what happens in most states. However, in the state of Maharashtra and Punjab, full
control has been given to ESIC. Thus, to offer healthcare facilities in these states, ESIS
comes into place.
Employees’ State Insurance Society (ESIS) is a mandate run by ESIC under an agreement
under which one part is ESIC and the other is the State Government. Despite this, ESIS and
its facilities are run independently by the society. All primary medical arrangements,
secondary tie-ups and medical reimbursement are undertaken by this society.
Because of the development of such a society, ESIC does not have to pay any of the funds
generated to the State Government. Every expense that is incurred by the society such as on
hospitals, patients, medicines, and equipment is fully (100%) reimbursed by ESIC.
Applicability of the Act
 
The ESI scheme is applicable to all factories and other establishments as defined in the Act
with 10 or more persons employed in such establishment and the beneficiaries’ monthly wage
does not exceed Rs 21,000 are covered under the scheme. Whether the employer has
employed 10 or more employees, all employees employed by the employer, agnostic of the
salary are reckoned.  
 Complete medical care and attention are provided by the scheme to the
employee registered under the ESI Act, 1948 at the time of his
incapacity, restoration of his health and working capacity. 
 During absenteeism from work due to illness, maternity or factories
accidents which result in loss of wages complete financial assistance is
provided to the employees to compensate for the wage loss. 
 The scheme provides medical care to family members also. As of 31
March 2021, 3.49 crores insured persons/family units are covered under
this scheme with the total number of beneficiaries standing at over
13.24 crores. 
 Broadly, the benefits under this scheme are categorized under two
categories: 
o Cash benefits (which includes sickness, maternity, disablement
(temporary and permanent), funeral expenses, rehabilitation
allowance, vocational rehabilitation and medical bonus) and, 
o Non-cash benefits through medical care. 
 The scheme is self-financing and being contributory in nature. The
funds under the ESI scheme are primarily built out of the contribution
from the employees and employers payable monthly at a fixed
percentage of wages paid. 
 Currently, the employee contribution rate is 0.75% of the wages and
that of employers is 3.25% of the wages paid. 
 The employer makes the contribution from his own share in favour of
those employees whose daily average wage is Rs 137 as these
employees are exempted from his own contribution. 
 The employer is required to pay his contribution and deduct employees’
contribution from wages and deposit the same with ESIC within 15
days from the last day of the calendar month in which the contribution
falls due. The payment can either be done online or through designated
and authorized public sector banks. 
 Exemptions
The following are the exemptions in the Employee State Insurance (ESI) scheme in India and
their reasons:
1. Section 87 provides an exemption to the members of the Indian armed forces from the
ESI Scheme.
Reason: The members of the Indian armed forces are already covered under other
social security schemes provided by the government. Therefore, they are exempted
from the ESI Scheme.
2. Section 88 provides an exemption to the employees who are covered under the
Workmen's Compensation Act, 1923, from the ESI Scheme.
Reason: The employees who are covered under the Workmen's Compensation Act are
entitled to compensation in case of work-related injuries. Therefore, they are
exempted from the ESI Scheme.
3. Section 90 provides an exemption to the employees who are eligible for medical
benefits under the Central Civil Services (Medical Attendance) Rules, 1944, or any
corresponding rules from the ESI Scheme.
Reason: The employees who are eligible for medical benefits under the Central Civil
Services (Medical Attendance) Rules, 1944, or any corresponding rules are already
provided with medical facilities by the government. Therefore, they are exempted
from the ESI Scheme.
4. Section 91 provides an exemption to employees who are employed in factories or
establishments that are exempted by the Central Government, by notification in the
Official Gazette, from the ESI Scheme.
Reason: The Central Government may exempt certain factories or establishments
from the ESI Scheme if they provide their own medical facilities to their employees or
are covered under other social security schemes.
5. Employees with a monthly salary of more than Rs. 21,000 are exempted from the
scheme, as they are considered higher-income earners and are expected to have
adequate social security coverage.
Reason: The ESI Scheme is designed to provide social security coverage to low-wage
employees. Therefore, employees with a monthly salary of more than Rs. 21,000 are
exempted as they are expected to have adequate social security coverage.
6. Employees who are covered under other social security schemes such as the
Employees' Provident Fund (EPF) and the National Pension Scheme (NPS) are also
exempted from the ESI scheme, as they are already covered under other schemes.
Reason: Employees who are covered under other social security schemes are already
provided with social security coverage. Therefore, they are exempted from the ESI
Scheme.
7. Employees who are working in establishments with fewer than 10 employees, or
those who are engaged in certain types of businesses, such as educational institutions
and charitable organizations, are exempted from the scheme.
Reason: Establishments with fewer than 10 employees may not have the resources to
provide social security coverage to their employees. Similarly, educational institutions
and charitable organizations may have their own social security schemes in place.
Therefore, they are exempted from the ESI Scheme.
 8. Casual workers and daily wage earners are not covered under the ESI scheme, as they
may not be regular employees and may not have a fixed income.
Reason: Casual workers and daily wage earners may not have a fixed income or may
not be regular employees
9. Apprentices who are undergoing training are also exempted from the ESI scheme, as
they are not considered employees.
10. Factories that are purely seasonal in nature and work only for a part of the year are
exempted from ESIC coverage.
11. Power generation plants and water supply factories are exempted from ESIC
coverage.
12. Factories belonging to the government and local authorities are exempted from ESIC
coverage.
13. Factories that are engaged in certain types of industries, such as:
a. Khadi and village industries.
b. Brick making or beedi making.
c. Private medical institutions that are not run for profit.
d. Private educational institutions that are not run for profit.
e. Factories engaged in printing or publishing.
f. Factories that manufacture electrical equipment or parts.
g. Factories that manufacture leather or leather products.
h. Factories that manufacture cement.
i. Factories that manufacture or repair bicycles.
These exemptions are intended to ensure that the ESI scheme is targeted towards those who
are most in need of social security coverage, while avoiding duplication of coverage and
reducing the burden on employers and employees who may already be covered under other
schemes.
Benefits provided under the ESIC Act
The benefits provided under the ESIC Act are divided into two types:
 Medical Benefits: The IP and their dependents can avail healthcare benefits from any
ESI network hospitals
 Cash Benefits: The employees who are beneficiaries of this scheme can receive cash
benefits in case of sickness, permanent or temporary disability, dependent, maternity,
funeral costs, unemployment, confinement, physical and vocational rehabilitation
Besides these benefits, other benefits that are being provided to beneficiaries are:
 Unemployment Allowance (RGSKY)
 Confinement Expenses
 Funeral Expenses
 Vocation Rehabilitation
 Skill Upgradation Training
 Atal Bimit Vyakti Kalyan Yojana (ABVKY)
 The Covid-19 relief Scheme (CRS)
 Cash Benefits
The various cash benefits provided under the ESI Scheme are:
 Sickness Benefit
 Maternity Benefit
 Disablement Benefit
 Dependents Benefit
 Funeral Expenses
Employees of predefined categories of factories and establishments, drawing wages up to
₹21,000/-a month, are entitled to this social security cover under the ESI Act.
To avail cash benefits, the IP submits their details and the kind of problem that they are
facing in the branch office, i.e., the local office and then get paid accordingly.
If an employee is in need of availing benefits in a period not covered by their contribution,
he is eligible for medical benefits but not for cash benefits.
Sickness Benefit
Sickness Benefit represents periodical cash payments made to an IP during the period of
certified sickness (Prescribed certificates are; Forms 7,8,9 and 10) occurring in a benefit
period when the IP requires medical treatment and attendance with abstention from work on
medical grounds.

Qualifying conditions:

 To become eligible to Sickness Benefit, an IP should have paid contribution for not
less than 78 days during the corresponding contribution period.
 A person who has entered into insurable employment for the first time has to wait for
nearly 9 months before becoming eligible to sickness benefit, because his
corresponding benefit period starts only after that interval.
 Sickness Benefit is not payable for the first two days of a spell of sickness except in
case of a spell commencing within 15 days of closure of earlier spell for which
sickness benefit was last paid. This period of 2 days is called "waiting period". This
provision should be clearly understood by Insurance Medical Officer (IMO) /
Insurance Medical Practitioner (IMP) as actual experience shows that such of IP who
want to avail medical leave on flimsy grounds generally come for First
Certificate/First & Final Certificate within 15 days of earlier spell, usually on unpaid
holidays and/or on each weekly off etc, to avoid loss of benefit for 2 days due to fresh
waiting period.
With the development of ‘E-Office,’ the need for an IP to physically visit a branch office to
submit a sickness certificate has been eradicated. If an IP is sick and gets a certificate from
the doctor, the IP can submit the certificate online and the branch office to which the IP is
connected gets the certificate. After receiving the certificate and matching the details of the
employee, money is directly transferred to the IP’S bank account.
Sickness benefit is 70% of the average daily wages and is payable for 91 days during 2
consecutive benefit periods.
Extended Sickness Benefit
This is an additional sickness benefit provided by ESIC in exercise of its powers under
Section 99 of the Act. An IP who has completed two years of insurable employment and
contributed for not less than 156 days during this period is entitled to extended sickness
benefit for a period of 309 days for the 34 specified long-term diseases. This period can be
extended up to 730 days or till the IP attains the age of 60 years whichever is earlier. The IP
and his family are also entitled to Medical Benefit during this extended period. The daily rate
of extended sickness benefit shall be equal to 80% of the average daily wages.
Enhanced Sickness Benefit
To promote small family norms, this cash benefit is paid to the insured person for undergoing
vasectomy or tubectomy operations. This is paid for a period of 7 days for vasectomy
operation and for 14 days for tubectomy operation. This period can be extended in case of
any post operative complications. The daily rate of enhanced sickness benefit shall be equal
to 100% of the average daily wages.
Maternity Benefit
Maternity benefit is periodical payment(s) to an insured woman for specified period of
abstention from work, due to confinement, miscarriage or sickness arising out of pregnancy,
pre-mature birth of child or miscarriage or confinement.

With effect from 20th January, 2017 Maternity Benefit has also been extended to a
“commissioning mother' (who as biological mother wises to have a child and prefers to get
embryo implanted in any other woman) and an insured woman who legally adopts a child of
up to three months of age.

Maternity benefit rate is equal to 100% of average daily wages, subject to the payment of
contribution for not less than 70 days in the immediately preceding one or two contribution
periods, in the following manner:

 Maternity Benefit is payable for a maximum period of 26 weeks up to 2 surviving

children in case of confinement of which not more than 8 weeks shall precede the
expected date of confinement, on production of form 17, 18, 19, 20 and 21.

 For miscarriage or Medical Termination of Pregnancy (MTP), the benefit is payable

for 6 weeks (42 days) from the date following miscarriage.

 For sickness arising out of Pregnancy, Confinement, Premature birth, the benefit is
payable for a period not exceeding one month-on the basis of Forms 7, 8, 9 and 10.

 In the event of the death of the Insured Woman during confinement leaving behind a
child, Maternity Benefit is payable to her nominee on production of Form 24 (B).
 In case of Commissioning mother or adoptive mother, the Insured woman will be paid
maternity benefit for 12 weeks from the date the child is handed over to the
commissioning mother or adopting mother as the case may be.
 Confinement Expenses is lump sum payment made to an insured woman or an insured
person in respect of his wife if the confinement occurs at a place where necessary
facilities under the ESI Scheme are not available. At present the confinement
 expenses paid is Rs. 5000/-per confinement with effect from 1st October, 2013. It is
admissible for two confinements only.

To obtain Maternity Benefit, the insured woman must get certificates of pregnancy, of the
expected date of confinement and of actual confinement and send them to the local office to
which she is attached.

Disablement Benefit
Disablement benefit is provided to insured workers who suffer from a disability caused by an
employment injury as an employee if he is certified to be eligible for such payment by an
authority specified in this behalf.
Disablement: Disablement is a condition resulting from employment injury, which may
render the insured person temporarily incapable of doing his work and necessitating medical
treatment (temporary disablement). It may reduce his earning capacity (permanent partial
disability) or it may totally deprive the insured person from the capacity of doing any work
(permanent total disability).
Employment Injury: "Employment Injury" has been defined under Section 2(8) of the Act, as
a personal injury to an employee caused by accident or occupational disease arising out of
and in the course of his employment, being in insurable employment, whether the accident
occurs or the occupational disease is contracted within or outside the territorial limits of
India.
Occupational Disease: Workers employed in certain occupations are exposed to certain
diseases which are inherent to their employment. Contacting any disease, while in
employment for a specified period in any of the industries listed in Part A, B, or C of
Schedule III to the Act is called Occupational disease. Occupational health hazards can be of
two main types. Short term and high dose with acute on set, synonymous with acute
poisoning, included by large dose of a toxic substance in an industrial environment, and the
other one is chronic onset, which is the result of repeated or continuous exposure of small
doses of substances.
The contracting of any occupational disease specified in the Third Schedule of the Act shall,
unless the contrary is proved, be deemed to be an ‘employment injury’ arising out of and in
the course of employment:
a) If an employee employed in any employment specified in Part A of the Third
Schedule contacts any diseases specified therein as an occupational disease peculiar to
that employment, or
b) If an employee employed in any employment specified in Part B of that Schedule for
a continuous period of not less than 6 months contacts any disease specified therein as
an occupational disease peculiar to that employment, or
c) If an employee employed in any employment specified in Part C of that Schedule for
such continuous period as the E.S.I. Corporation may specify in respect of each such
employment, contacts any disease specified therein as an occupational disease
peculiar to that employment.
Temporary Disablement
Temporary Disablement Benefit is payable to an employee who suffers employment injury
(EI) or Occupational Disease and is certified to be temporarily incapable to work.
Contributory condition: The benefit is not subject to any contributory conditions. An Insured
Person is eligible from the day he joins the insurable employment.
Certificates Required for TDB: Accident Report in form 12, Form 8,9,10, 11 and ESIC
Med.13.
Duration of benefit: Not payable if disability lasts for less than 3 days (excluding the day of
accident). Otherwise, payable for the entire period, so long as the temporary disability lasts. If
a Temporary Disablement spell lasts for less than 3 days (excluding day of accident), Insured
Person will be paid sickness benefit, if otherwise eligible. A special point for Insurance
Medical Officers/ Insurance Medical Practitioners is that some Insured Persons may resist
taking a Final Certificate especially before 3 days for fear of loss of Temporary Disablement
Benefit.
Rate: 90% of the average daily wages
Permanent Disablement
Permanent Disablement Benefit is payable to an Insured Person who suffers permanent
residual disablement as a result of Employment Injury (including Occupational Diseases) and
results in loss of earning capacity. The proper authority for assessing loss of earning capacity
for injuries is the Medical Board and for Occupational Diseases, Special Medical Board.
Contributory condition: No prior contribution is needed for claiming disablement benefit.
Paid for permanent disablement, whether total or partial, caused by accident or an
occupational disease arising out of and in the course of insurable employment.
Duration of Benefit: Periodical payments equal to the percentage of the loss of earning
capacity caused by the employment injury for the period given by Medical Board, if
assessment is provisional or for entire life if assessment is final.
Rate: The Permanent Disablement Benefit rate is calculated as percentage of loss of earning
capacity as assessed by the Medical Board/Medical Appeal Tribunal /Employees’ Insurance
Court in relation to Temporary Disablement Benefit. List of injuries deemed to result in
permanent total disablement and percentage loss of earning capacity has been previewed in
2nd Schedule to ESIC Act, 1948. Hence, the maximum rate of Permanent Disablement
Benefit can be equal to the rate of Temporary Disablement Benefit. The Permanent
Disablement Benefit amount is revised by the ESIC from time to time to adjust for inflation.
The latest enhancement is with effect from 13.09.2019.
The benefit can be paid through ECS in the bank Account of IP or by Money Order at the
cost of the Corporation. The insured person can also opt for the payment in lump sum if his
daily rate of PDB does not exceed rupees ten or even if it exceeds ten per day, and the
commuted value does not exceed Rupees 60000.
Dependant’s Benefit
Dependants' Benefit is a monthly pension payable to the eligible dependants of an insured
person who dies as a result of an employment injury or occupational disease. The first benefit
payment is made from the Branch Office. Subsequent periodical payments are made through
direct bank transfer (DBT) to the beneficiaries. The age of dependants, has to be determined
either by production of Documentary evidence as specified in Regulation 80(2) or Age
certified by Medical Officer In charge of Government Hospital or Dispensary.
Contributory condition: No condition. From day one of entering insurable employment in
case of death due to employment injury.
Duration and Rate: The rate of dependants' benefit is 90% of standard benefit rate of the
wages of the deceased insured person. It is apportioned among the dependants as follows:
 Widow: Till death or remarriage at 3/5th of the full rate.
 Widowed mother till death @2/5th of the full rate,
 to each child @ 2/5th of the full rate each till he attains the age of twenty –five years.
 Unmarried daughters @2/5th of the full rate till they get married.
 If the son or daughter is infirm and wholly dependent on the earnings of the insured
person at the time of his death, they continue to receive the benefit even after attaining
the age of 25 years/marriage as the case may be.
If the total dependants' benefit for all the dependents worked out as above exceeds at any
time, the full rate, the share of each of the dependents shall be proportionately reduced, so
that the total amount payable to them does not exceed the amount at full rate. In case
deceased, Insured person does not leave behind any of the dependents referred above, then
his parents will get 3/10th share or if no parent is alive then alive his paternal grant parent will
get 3/10 share of full rate of dependent benefit.
Funeral Expenses
 
ESIC has prescribed Form 22 to claim funeral expense of deceased ESIC member. The
family members need to claim ESI funeral expenses within 6 months from the date of the
death of the insured person by filing Form 22 with the ESIC Office where the deceased
employee was covered.

To claim ESIC funeral expenses the relatives of the deceased member should need to
submit ESIC funeral expenses claim form 22 and ESIC Pehchan card of the deceased
member to the ESIC branch office within 6 months after the completion of final rituals. 
 
There are so many other benefits which ESIC is providing to the insured persons. But the
above mentioned Three benefits are mostly related to the family members of the insured
person. 

To claim ESIC funeral expenses the relatives of the deceased member should need to submit
ESIC funeral expenses claim form 22 and ESIC Pehchan card of the deceased member to the
ESIC branch office within 6 months after the completion of final rituals. 
 
There are so many other benefits which ESIC is providing to the insured persons. But the
above mentioned Three benefits are mostly related to the family members of the insured
person. 

Medical Benefits
Meaning:
Medical benefit means all payments regarding medical attendance and treatments of an
insured person are made under this title to the providers of medical care by ESI Corporation.
It takes care of an individual’s medical expenses.
Who gets the Benefit?
An insured person and/or a member of his family whose condition requires medical treatment
an attendance shall be entitled to receive medical treatment for and attendance on insured
persons, at the request of the appropriate government, and subject to such condition as may
be laid down in the regulations, to extend the benefit to the family of the insured person.
Eligibility:
 The employee should be enrolled as an insured person under ESIC Scheme.
 Must be a resident of India.
 To avail this benefit, the employee should be less than 65 years of age and there is no
minimum age to be eligible for this scheme.
 A person is entitled to medical benefit during any period for which contributions are
payable in respect of him or in which he is qualified to claim sickness
benefit/maternity benefit/is in receipt of such disablement benefit as does not
disentitle him to medical benefits.
 Nature of employment of employee must be covered under the definition of
employment under this scheme.
Procedure
1. Enrol in the scheme: First you have to register yourself as an insured person under
this scheme.
2. Get ESIC Card: After enrolling, employee receives an ESIC Card as an identification
and proof of coverage under this scheme.
3. Visit an ESIC authorized hospital: Whenever required, visit an ESIC authorised
hospital with your ESIC Card and a valid photo ID proof. There is a list of authorised
hospital on their website.
4. File a Claim: After treatment, the employee needs to file a claim for reimbursement
for the medical expenses incurred.
NOTE: This procedure may vary from location to location and type of treatment required by
an insured person.
Provision of Medical treatment
Because health is a state matter, it is the administrative duty of the state government to
provide medical benefits. Although there is no cap on the costs an employee can spend under
this benefit, the amounts are only paid in accordance with the rates the central government
has set for routine check-ups and testing.
If it is determined that the sum is more than the national average, the Employees State
Insurance Corporation and the state government will split the surplus in accordance with any
arrangement they may have made.
Hospitals
Since 1952, the infrastructural network of the scheme has kept expanding to meet the social
requirements of an ever-increasing worker population. ESIC has so far set up 159 hospitals
(110 ESIS hospitals and 49 ESIC hospitals) for inpatient services (visits to the home of the
insured person). Primary and out-patient (attendance in a hospital and dispensary, clinic or
other institutions) medical services are provided through a network of about 1502/308 ESI
dispensaries/ISM Units. In order to provide primary medical services and cash benefits at one
place, the Corporation has opened 49 Dispensary-cum-Branch Offices (DCBO).
The total beneficiaries’ stands at over 13.24 crores. In Maharashtra, there are 47 lakh insured
persons with the total of 15(3 ESIC Hospitals and 12 ESIS Hospitals) hospitals and 81
Dispensaries (ESIC- 13 DCOBs, ESIS- 68 Dispensaries) and 726 Insured medical
practitioners(IMPs) to ensure doorstep delivery of medical facilities in all corners of the state.
Conclusion
In conclusion, the field visit to the Employees' State Insurance Corporation (ESIC) office has
provided a comprehensive understanding of the ESIC Act, 1948, and its practical
implementation. The visit has allowed us to observe the ESIC's organizational structure and
functioning, enabling us to understand the actual on-ground impact of the Act on the lives of
employees in the organized sector.
The ESIC office is well-equipped and organized, with trained staff who are dedicated to
serving insured persons. We have seen first-hand the efficiency of the office, with the staff
processing claims quickly and efficiently. Moreover, the office's digitalization efforts have
made the process of accessing and applying for benefits smooth and easy for the
beneficiaries.
The ESIC Act, which was enacted to provide social security to workers in the organized
sector, has made a significant impact on the lives of the beneficiaries. The Act mandates that
every employer with more than ten employees must register with the ESIC and provide health
and other benefits to their employees. These benefits include medical care, sickness,
maternity, and disablement benefits. The Act's provisions have ensured that the beneficiaries
have access to medical facilities and financial assistance in case of any contingency, reducing
their financial burden and increasing their social security.
The ESIC Act has also enabled the creation of a large network of ESIC hospitals and
dispensaries across India, providing quality medical care to beneficiaries. The Act has had a
profound impact on the beneficiaries' lives, as they are now confident that they will receive
medical care and financial assistance when they need it the most.
Overall, the field visit to the ESIC office has been a valuable experience, allowing us to
understand the practical implementation of the ESIC Act and appreciate the work being done
by the ESIC in providing social security to workers in the organized sector. The ESIC Act
has been a significant step towards achieving social justice and welfare for workers, and we
hope that it will continue to be implemented effectively to reach every worker who needs
social security.
References
[1] Employees’ State Insurance Corporation, Ministry of Labour & Employment, Government
of India. (n.d.). https://www.esic.gov.in/ (Date of visit: 12th February, 17th February and 18th
February, 2023)

[2] Employee State Insurance Corporation Schemes & Benefits (ESIC). (n.d.). BankBazaar.
https://www.bankbazaar.com/health-insurance/employee-state-insurance-corporation-
scheme.html (Date of visit: 17th February, 2023)

[3] Kapoor, N. D. (2023). Elements of MERCANTILE LAW.

Glimpses of our visit at ESIC