It is social security legislation which provides benefits in terms of maternity leaves, sickness, injury caused. It is applicable to establishments where 20 or more persons are employed or were employed on any day in the preceding 12 months. It is applicable to employees drawing a salary not exceeding Rs. 21,000 per month.
Once the Act becomes applicable to the factory or establishment the employer must get the factory or establishment registered with the Employees State Insurance Corporation within 15 days. It is a self-financing health insurance scheme.ย
[Suggested Read: Shops and Commercial Establishments Act (S&E), 1961 – Brief Notes]
According to a recent development, a Universal Social security Code will be established which will divide the workers into four categories. The Code looks forward to repealing the Employees State Insurance Corporation Act and the Employees Provident Fund Act. A welfare Board will be created for organised and unorganised workers. Unorganised workers will have to pay 12% of the wages and organised workers will have to pay 17% of the wages towards this fund.
- Under this Act, full medical coverage is provided to the employee from the date of employment and extends to his/her family. There is no ceiling on the amount.ย
- In case of sickness caused in the course of employment, the employee is entitled to cash compensation of the amount of 70% of the wage subject to contribution. It is extendable for even more compensation in case of enhanced sickness.ย
- If the person who has been insured for 3 or more years, is unemployed because of retrenchment, disability or place of employment has closed, then he is entitled to Unemployment allowance of 50% of wage for up to 1 year.ย
- Dependent or person performing last rites of the person is entitled to compensation up to Rs. 10,000.
- If the death of the employee occurs due to occupational injury or hazard, then the dependants of the person are entitled to compensation of 90% of the wage
[Suggested Read: Labour Rights]
