ESI: Social Security Scheme For Organised Workers


The Employees’ State Insurance Corporation has kick-started work on a nationwide roll-out of the social security scheme for organised workers once the Social Security Code is implemented, likely from April 1, 2020. The move will bring more and more workers under the social security cover, as envisaged by the government.

The organisation, under the labour ministry, has written to states to speed up creation of requisite medical infrastructure in 161 districts which are still out of the purview of the ESIC Act, 1948 while laying out the action plan for 2020-21.

“Once the implementation date of the Social Security Code is notified, the entire area of the country shall be implemented for the purpose of ESI Scheme. Therefore, it is imperative to make medical arrangement in all areas within this financial year itself,” it said in a letter dated October 23.

Currently, the ESIC scheme is fully notified in the entire area of 387 districts while in 188 districts it is only notified in the district headquarters or prominent industrial centres. However, the scheme is yet to be notified and implemented in the remaining 161 districts of India.

The ESIC bears the entire expenditure on medical care for an initial period of three years in case of implementation of the scheme in new areas.

The Employees’ State Insurance Corporation is a social security organization providing comprehensive social security benefits like reasonable medical care and a range of cash benefits in times of need such as employment injury, sickness, death etc.

The ESI Act applies to premises or precincts where 10 or more persons are employed. The employees drawing wages up to Rs 21,000 a month are entitled to health insurance cover and other benefits, under the ESI Act. While the employer contributes 3.25% of the employees monthly wages to ESIC, the employee contributes 0.75%, taking the total monthly contribution to 4% of the wages as against 6.5% earlier to avail the benefits.
The Act now applies to over 12.11 lakh factories and establishments across the country, benefiting about 3.49 crore family units of workers. As of now, the total beneficiary population of ESI Scheme stands over 13.56 crore.

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