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EMPLOYEES’ STATE INSURANCE SCHEME

 
COMPETITION LAW
LAW RELATING TO START UPS
FOOD LAWS
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REAL ESTATE LAW
COMPANY FORMATION LAW
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LABOUR LAW
 
Labour Laws and Constitution
Factories Act, 1948
Indian Industrial Disputes Act, 1947
Minimum Wages Act, 1948
Payment of Wages Act, 1936
Sexual Harassment of Women at Workplace Act, 2013
Maternity Benefits Act, 1961
The Payments of Gratuity Act, 1972
Payment of Bonus Act, 1965
Labour Law Compliance Rules
Employees Provident Fund
Employees' State Insurance
SPORTS LAW
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ECOMMERCE BUSINESS LAW
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The Employees’ State Insurance Scheme (hereinafter referred to as “Scheme”) is a social insurance scheme governed by Employees’ State Insurance Act, 1948 (hereinafter referred to as the “Act”).

 

The main aim of this Act is to protect the interest of employees working in the organized sector in the events of maternity, sickness, disability and death due to injury caused during employment.

 

The scheme provides monetary assistance to an employee to meet his/ her medical or other expenditures arising out of his absenteeism from work due to maternity, sickness or other injury caused during employment.

 

Applicability

 

ESI shall apply to all factories (including factories belonging to the Government) other than seasonal factories, except factories or establishments belonging to or under the control of the Government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.

 

The appropriate Government may, in consultation with the Corporation and where the appropriate Government is a State Government, with the approval of the Central Government, after giving one month’s notice of its intention of so doing by notification in the Official Gazette, extend the provisions of this Act or any of them, to any other establishment, or class of establishments, industrial, commercial, agricultural or otherwise.

 

Wage limit for coverage of an employee

 

According to Rule 50 of the Employees’ State Insurance (Central) Rules, 1950, the wage limit for coverage of an employee under Employees State Insurance Act was Rs. 10,000 which was later revised to Rs. 15,000. Most recently, Government of India through notification in the Official Gazette again amended the Rule 50 and enhanced the wage coverage from Rs. 15,000 to Rs. 21,000 with effect from January 01, 2017.

 

It is pertinent to mention that overtime is excluded for determining the wage ceiling. However, it is included for payment of contribution to cover the risk during the period employee was on overtime work, and to enable him to draw cash benefits at an enhanced rate also.

 

Also, if the wages of an employee (excluding remuneration for overtime work) exceeds the prescribed wage limit after start of contribution period, he/she continues to be an employee till the end of that contribution period and hence contribution is to be deducted and paid on the total wages earned by him.

 

Contribution

 

As per the Act, both employer and the employee are under an obligation to contribute certain amount to the Scheme. It shall be the duty of the employer to contribute at the rate of 4.75% of the wages paid/payable in respect of every wage period. Also, an amount equivalent to 1.75% of their wages shall be payable by the employee.

 

Benefits

 

As per the Act, the employees and their dependents are entitled to the following benefits;

  • Sickness Benefits

  • Maternity Benefits

  • Disablement Benefits

  • Dependent’s Benefits

  • Medical Benefits

  • Funeral Benefits

Penalty

 

Any person who contravenes any of the provision of this act shall be penalized as following;

 

S. No.

Contravention

Penalty

1.        

Failure to pay any contribution which under the Act a person is liable to pay

Fine and imprisonment for a term which may extend to three years

2.        

Deducts or attempts to deduct from the wages of an employee the whole or any part of the employer's contribution

Imprisonment for a term which may extend to one year or with fine which may extend to four thousand rupees, or with both

3.        

Reduces the wages or any privileges or benefits admissible to an employee

4.        

Dismisses or punishes employee during period of sickness, etc.

5.        

Fails or refuses to submit any return required by the regulations, or makes a false

return

6.        

Obstructs any Inspector or other official of the Corporation in the discharge of his duties

7.        

If a person is guilty of any contravention of or non-compliance with any of the requirements of this Act or the rules or the regulations in respect of which no special penalty is provide

 

For further information on Employees' State Insurance Scheme, please write to us at info@ssrana.com.

 

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