UNIT – I Lesson 1 HRM – AN OVERVIEW Lesson Outline Nature of ...

Employee’s State Insurance Act, 1948
The main object of this Act is to provide social insurance for workers. It is a
contributory and compulsory health insurance scheme that provides medical facilities and
unemployment insurance to industrial workers for the period of their illness.
The Act covers all workers (whether manual, supervisory or salaried employees)
whose income donot exceed Rs. 6500 per month and are employed in factories, other than
seasonal factories which are run with power and employ 20 or more workers. The State
Government can extend the coverage of the Act with the approval of the Central
Government.
The Act is administered by the Employees State Insurance Corporation (ESI), an
autonomous body with representatives of the Central, State Government, employers,
employees, medical profession and the parliament.
Benefits
a) Medical benefit : An insured or a member of his or her family
requiring medical help is entitled to receive medical facility free of
charge in a hospital either run by ESI corporation or by any other
agency.
b) Sickness benefits : An insured worker in case of certified sickness is
entitled to receive cash payment for a maximum of 91 days in any
continuous period of one year. The daily rate of sickness benefit is
calculated as half of average daily wage.
c) Maternity benefit : An insured woman is entitled to receive cash
payment calculated at a full average wage for a period of 12 weeks of
which not more than 6 weeks shall precede the expected data of her
confinement.
d) Disablement benefit : This benefit is entitled to insured worker in case
of industrial accidents and injury. Compensation differs depending on
temporary disablement, permanent partial disablement and permanent
total disablement.
e) Dependent’s benefit : the benefit is available to the dependents of a
decreased worker due to industrial accident or injury.