Benefits of ESI Registration

The ESI Act 1948, was promulgated to negate the financial distress of workers in times of sickness, maternity, temporary or permanent disablement, occupational disease or death due to employment injury - resulting in loss of wages or earning capacity-total or partial. ESI registration is mandatory for non-seasonal factories employing 10 or more persons. Further, ESI registration is also mandatorily required for shops, hotels, restaurants, cinemas including preview theatres, road-motor transport undertakings and newspaper establishments employing 20 or more persons. In this article, we look at the benefits of ESI registration.

Medical Benefit

Full medical care is provided to all persons registered under ESI and their family members - from the day the person enters insurable employment. There is no ceiling on expenditure on the treatment of an Insured Person or his family member. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs.120/-.

Sickness Benefit

Sickness benefit in the form of cash compensation at the rate of 70% of wages is payable to insured workers during the periods of certified sickness for a maximum of 91 days in a year. In order to qualify for sickness benefit, the insured worker is required to contribute for 78 days in a contribution period of 6 months. Workers suffering from malignant and long-term diseases can claim extended sickness benefit for upto two years at an enhanced rate of 80% of wages. Also, enhanced sickness benefit equal to full wage is payable to insured persons undergoing sterilization for 7 days/14 days for male and female workers respectively.

Maternity Benefit

Maternity benefit for confinement/pregnancy is provided for three months, which is extendable by further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding year.

Disablement Benefit

From the day of entering insurable employment and irrespective of having paid any contribution, 90% of wage is payable so long as temporary disability continues. Permanent disablement benefit is payable at the rate of 90% of wage in the form of monthly payment, in case of permanent disablement based on the extent of loss of earning capacity as certified by a Medical Board.

Dependant Benefit

Dependant benefit is paid at the rate of 90% of wage in the form of monthly payment to the dependants of a deceased insured person, in cases death occurs due to employment injury or occupational hazards.

Funeral Expenses

An amount of Rs.10,000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment.

Unemployment Allowance

Under the Rajiv Gandhi Shramik Kalyan Yojana, unemployment allowance is payable to an insured Person who become unemployed after being insured three or more years, due to closure of factory/establishment, retrenchment or permanent invalidity. The applicable unemployment allowances provided are:

Unemployment Allowance equal to 50% of wage for a maximum period of upto one year.
Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives unemployment allowance.
Vocational Training provided for upgrading skills - Expenditure on fee/travelling allowance borne by ESIC.