Employees' State Insurance Scheme of India is an integrated social security scheme tailored to provide social protection to workers and their dependants, in the organised sector, in contingencies, such as, sickness, maternity and disablement or death dur to an employement injury or occupational hazard.
Employees' State Insurance Scheme is an integrated measure of Social Insurance embodied in the Employees' State Insurance Act and it is designed to accomplish the task of protecting 'employees' as defined in the Employees' State Insurance Act, 1948 against the impact of incidences of sickness, maternity, disablement and death due to employment injury and to provide medical care to insured persons and their families. The ESI Scheme applies to factories and other establishments viz. Road Transport, Hotels, Restaurants, Cinemas, Newspaper, Shops, Educational/Medical Institutions wherein 10 or more persons are employed. However, in some States/U.T threshold limit for coverage of establishments is still 20.
The "appropriate Government" (State or Central) is empowered to extend the provisions of the ESI Act to any class of establishments, industrial, commercial or agricultural or otherwise. Under these enabling provisions, the State Govts have extended the provisions of the ESI Act to certain specified class of establishments, such as, shops, hotels, restaurants, cinemas, preview theatres, road-motor transport undertakings and newspaper establishments.
The ESI Scheme is mainly financed by contributions from employees and employers, as a fixed percentage of wages. The employees contribute @1.75% of their wage while the employers contribute 4.75% of the total wages of the covered employees. Employees of covered units and establishments drawing wages upto Rs. 15000/- per month (excluding overtime)(w.e.f.01.05.2010) come under the purview of the scheme for social security benefits. However, employees' earning upto Rs. 100/- a day as wages are exempted from payment of their part of contribution.The State Govts bear one-eighth share of expenditure on Medical Benefit while the Corporation meets 7/8th share of expenditure thereon.
Employees covered under the scheme are entitled to medical treatment and attendance for self and dependants. They are also entitled to cash benefits in the event of specified contingencies resulting in loss of wages or earning capacity. The insured women are entitled to maternity benefit for confinement. Where death of an insured employee occurs due to employment injury, the dependants are entitled to family pension