THE EMPLOYEES' STATE INSURANCE ACT, 1948

The Employees’ State Insurance Act, 1948, provides to workers not only accident benefit but also other benefits such as sickness benefit, maternity benefit and medical benefit.

Wage Ceiling: Every employee drawing wages upto Rs. 15000.00 per month is required to be insured under the Act.

Objective of the Act: The object of the Act is to secure sickness, maternity, disablement and medical benefits to employees of factories and establishments and dependents’ benefits to the dependents of such employees.

Applicability:-Section 2(9) 'employee' under ESI means any person who is engaged/employed for wages/salary in connection with the work of the establishment to which this Act applies. But does not include any person whose wages (excluding OT) exceed the limit prescribed by the Central Govt. (which is 15000 pm now with effect from 1 May 2010).

Section 2(12) 'establishment/factory' under ESI means any premises whereon 20 or more persons are employed or were employed for wages.

If you combine both, you understand that if the total employees are 25 but out of which 14 are drawing gross more than 15000 pm, then only 11 employees come under ESIS and the criteria for 20 employees does not fulfil. Hence on above grounds it is not covered.

CHECK LIST

|Applicability of the Act & Scheme: Is extended in area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and |
|establishments employing 20 or more person upto Rs.15,000/- per month with effect from 01-May-2010. It has also been extend-ed upon shops, hotels, restaurants, roads |
|motor transport undertakings, equipment maintenance staff in the hospitals. |
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