finance and audit sha

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Employees State Insurance Act,1948

Presented By,

S.Rakshitha

Shashank Sukanya.D


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DefinitionsConfinement : means labour resulting in the issue of a living child, or labour after 26 weeks of pregnancy resulting in the issue of a child, whether alive or dead.

Corporation : means the ESIC set under this Act.

D ependant o Parents: Father and Mother other than a widowed mother may be called dependants

under the Act provided they succeed to show that they were wholly or in partdependant on the earnings of the deceased at the time of his death.

I mmediate Employer: Immediate Employer in relation to employees employed by or throughhim, means :

o A person who has undertaken to execute work in the premises of a factory or est. towhich this Act applies; or

o Who has undertaken to execute some work under the supervision of the principalemployer or his agent; or

o That the work undertaken must be either in whole or in part of any worko It also includes a person by whom the services of an employee who has entered into a

contract of service with him are temporarily lent or let on hire to the principal employer.o It also includes a contractor.


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Employment I njury: The following are the ingredients of an Employment Injury-

o The injury must be personal to an employee.o The injury must be caused by an accident or occupational disease.o The accident must arise out of and in the course of employment.o The employment must be insurable.

I nsured Person: means a person who is or was an employee in respect of whomcontributions are or were payable under this Act and any person who is entitled to any of thebenefits provided by this Act.

W ages: Wages meanso all remuneration paid or payable, in cash to an employee, provided that the terms of

employment, express or implied, are fulfilled; ando any payment to an employee in respect of any period of authorised leave, lock out or

strike which is not illegal or lay-off; ando other additional remuneration, if any, paid at intervals not exceeding two months, but

does not include :(a) any contribution paid by the employer to any pension fund or provident fund;(b) any travelling allowance or the value of any travelling concession;(c) any sum paid to the person employed to defray special expenses entailed on him by thenature of his employment; or(d) any gratuity payable on discharge.

Definitions


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Finance and Audit


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ESI Fund(section 26)1) All contributions paid under this Act and all other moneysreceived on behalf of the Corporation is paid into a fund called theEmployees' State Insurance Fund which is administered by theCorporation for the purposes of this Act.(2) The Corporation may accept grants, donations and gifts from theCentral or any State Government, local authority, or any individualor body whether incorporated or not, for all or any of the purposesof this Act.(3) All moneys accruing or payable to the said Fund shall be paidinto the Reserve Bank of India or such other bank as may beapproved by the Central Government to the credit of an accountstyled the account of the Employees' State Insurance Fund.(4) Such account shall be operated on by such officers as may beauthorised by the Standing Committee with the approval of theCorporation.


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P urposes of the fundThe Employees' State Insurance Fund shall be expended only for thefollowing purposes, namely :--(i) payment of benefits and provision of medical treatment andattendance to insured persons and, where the medical benefit isextended to their families, the provision of such medical benefit totheir families,(ii) payment of fees and allowances to members of the Corporation,the Standing Committee and the Medical Benefit Council, theregional boards, local committees and regional and local MedicalBenefit Councils;(iii) payment of salaries, leave and joining time allowances,travelling and compensatory allowances, gratuities andcompassionate allowances, pensions, contributions to provident orother benefit fund of officers and servants of the Corporation


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(iv) establishment and maintenance of hospitals, dispensariesand other institutions and the provision of medical and other

ancillary services

v) payment of contributions to any State Government, localauthority or any private body or individual, towards the cost of medical treatment and attendance provided to insured personsincluding the cost of any building and equipment in accordancewith any agreement entered into by the Corporation;

(vi) defraying the cost (including all expenses) of auditing the

accounts of the Corporation and of the valuation of its assetsand liabilities;

(vii) defraying the cost (including all expenses) of theEmployees' State Insurance Courts set up under this Act;


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(viii) payment of any sums under any contract entered into forthe purposes of this Act by the Corporation or the StandingCommittee or by any officer duly authorised by the Corporation

or the Standing Committee in that behalf;

(ix) payment of sums under any decree, order or award of anyCourt or Tribunal against the Corporation

(x) defraying the cost and other charges of instituting ordefending any civil or criminal proceedings arising out of anyaction taken under this Act;

(xi) defraying expenditure, within the limits prescribed, onmeasures for the improvement of the health and welfare of insured persons and for the rehabilitation and re-employment of insured persons who have been disabled or injured; and

(xii) such other purposes as may be authorised by theCorporation with the previous approval of the CentralGovernment.


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H olding of propertyBudget estimates and accountsAdministrative expenses


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Budget, audited accounts and the annual report tobe placed before Parliament

The annual report, the audited accounts of the Corporation together with the report of the Comptroller and Auditor-General of Indiathereon and the comments of the Corporationon such report and the budget as finallyadopted by the Corporation shall be placed

before P arliament


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Audit

(1) The accounts of the Corporation shall be auditedannually by the Comptroller and Auditor-General of Indiaand any expenditure incurred by him in connection withsuch audit shall be payable by the Corporation

(2) H e and any person appointed by him shall have thesame rights and privileges and authority in connection as inconnection with the audit of government accounts andhave the right to demand the production of books,accounts, connected vouchers and other documents andpapers and to inspect any of the offices of the Corporation.(3) The accounts with the audit report thereon shall beforwarded to the Corporation which shall forward the sameto the Central Government along with its comments on thereport


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ContributionsAll employees in factories or est. to which this Act appliesshall be insured in the manner provided by this Act.

The contribution payable under this Act shall comprisecontribution payable by the employer (referred to as theemployers contribution) and contribution payable by theemployee (referred to as the employees contribution) andshall be paid to the Corporation.

The contributions shall be paid at rates prescribed by theCentral Govt.


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Contributions

The contributions payable in respect of eachwage period shall ordinarily fall due on the lastday of the wage period & where an employee isemployed for part of the wage period or isemployed under 2 or more employers during thesame wage period, the contributions shall fall dueon days as specified in the regulations.

If any contribution payable under this Act is notpaid by the principal employer on the date on

which such contribution has become due he shallbe liable to pay simple interest at the rate of 12%p.a or at higher rate as specified in theregulations till the date of its actual payment.


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P rincipal employer to pay contribution

If any contribution payable under this Act isnot paid by the principal employer on thedate on which such contribution hasbecome due, he shall be liable to paysimple interest at the rate of twelve percent per annum or at such higher rate as

may be specified in the regulations till thedate of its actual payment :


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R ecovery of contribution from immediateemployer

A principal employer, who has paid contribution in respectof an employee employed by or through an immediateemployer, shall be entitled to recover the amount of the

contribution so paid (that is to say the employer'scontribution as well as the employee's contribution, if any)from the immediate employer, either by deduction fromany amount payable to him by the principal employerunder any contract, or as a debt payable by the immediate

employer.


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The immediate employer shall maintain register of employees employed by or through him as provided in theregulations and submit the same to the principal employerbefore the settlement of any amount payable

In the case the immediate employer shall be entitled torecover the employee's contribution from the employeeemployed by or through him by deduction from wagesand not otherwise


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E mployers to furnish returns and maintain registers incertain cases

Every principal and immediate employer shall submit tothe Corporation or to such officer of the Corporation as itmay direct

returns in such form and containing particulars relating topersons employed by him or to any factory orestablishment in respect of which he is the principal or

immediate employer as may be specified in regulationsmade in this behalf.


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(2) Where in respect of any factory or establishmentthe Corporation has reason to believe that a return

should have been submitted but has not been sosubmitted, the Corporation may require any personin charge of the factory or establishment to furnishsuch particulars as it may consider necessary for thepurpose of enabling the Corporation to decidewhether the factory or establishment is a factory orestablishment to which this Act applies.

(3) Every principal and immediate employer shall

maintain such registers or records in respect of hisfactory or establishment as may be required byregulations made in this behalf.


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Inspectors, their functions and duties

ESI Corporation may appoint such persons as Inspectors, asit thinks fit to

(a) require any principal or immediate employer to furnishto him such information as he may consider necessaryat any reasonable time enter any office, establishment,factory examine such accounts, books and otherdocuments relating to the employment of personsexamine the principal or immediate employer, his agent orservantmake copies of, or take extracts from, any register, accountbook or other documentexercise such other powers as may be prescribed


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D etermination of contributions in certain cases

Where in respect of a factory or establishment no returns, particulars,registers or records are submitted, furnished or maintained inaccordance with the provisions and any Inspector or other official isprevented in any manner by the principal or immediate employer orany other person, in exercising his functions or discharging his dutiesthe Corporation may, on the basis of information available to it, byorder, determine the amount of contributions payable in respect of the employees of that factory or establishment : H owever no such order shall be passed by the Corporation unless theprincipal or immediate employer or the person in charge of thefactory or establishment has been given a reasonable opportunity of being heard.

R ecovery of contributionsAny contribution payable under this Act may be recovered as anarrear of land revenue.


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Employee's State Insurance Corporation:

It is a statutory body which has been created toadminister & execute the Employees' stateinsurance scheme or ESI scheme.


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CONSTITUTION OF CORPORATION

The Corporation shall consist of the followingmembers:

(a) a Chairman to be appointed by the CentralGovernment

(b) a Vice-Chairman to be appointed by the

Central Government

(c) not more than five persons to be appointed bythe Central Government.


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(d) one person each representing each of theStates in which this Act is in force to be appointedby the State Government concerned;

(e) one person to be appointed by the CentralGovernment to represent the Union territories

(f) 10 persons representing employers to beappointed by the Central Government in

consultation with such organisations of employersas may be recognised for the purpose by theCentral Government


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(h) 2 persons representing the medical professionto be appointed by the Central Government inconsultation with such organisations of medicalpractitioners as may be recognised for the purposeby the Central Government

(i) 3 members of Parliament of whom 2 shall bemembers of Lok Sabha and 1 shall be a member of Rajya Sabha elected respectively by the twoHouse

(j) the Director General of the Corporation, exofficio.


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Powers of E.S.I Corporation:

1) Employment of Staff [section 17] : It mayemploy the necessary staff for the efficienttransaction of its business.

2) Promotion of Measure for health [section19] : Inaddition to the benefits specified in the Act,promote measures for the improvement of health

& welfare of insured person & for re-employmentof insured person who has been disable or injured.


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3) Holding of property [section29] : It can hold &sell or otherwise transfer any movable &immovable property which have been acquired byit.

4) Appointment of inspector [section45]: Appointinspectors as it think fit for the purpose of this act

5) Determination of contribution [section45A]:determine the amount contribution payable inrespect of employees of a factory


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Duties of E.S.I Corporation:

1) Budget Estimation [section32]: every year itframe a budget showing receipts & expenditurewhich it proposes to incur during the following year.

2) Accounts [section33]: maintain correct accountof income & expenditure in such a form asprescribed by central government

3) Audit [section34]: account is duly audited by theauditor appointed by central government.


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4) Annual report [section35]: submit annual report

of its work & activity to the central government:5) Valuation of assets & liabilities [section37]: atintervals of 5yrs valuation of assets & liabilities is

made by the valuer appointed by centralgovernment

6) Placement before parliament [section36]:

annual report, audited accounted, auditor report &final budget adopted shall be placed beforeparliment & published in the office gazette


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Standing Committee:Empowered to-

1) Shall administer the affair of the corporation

2) Shall submit the consideration & decision of thecorporation

3) Have freedom to decide on the issues of corporation


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Medical Benefit Council:

1) Advice to administration on medical benefits,purpose of grants & related matter

2) Have powers & duties of investigation as maybe prescribed in relation to complaints againstmedical practitioners in connection with medicaltreatment & attendance

3) Perform other duties in connection with medicaltreatment as may be specified in the regulations


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Benefits to Employees

ESI Scheme Major Social Security Benefits in Cash and Kindinclude

1. Medical Benefit for self & Family2. Sickness Benefit for self 3. Maternity Benefit - for self 4. Disablement Benefit

a). Temporary Disablement Benefit for self b). Permanent Disablement Benefit for self

5. Dependents Benefit for dependents in case of death dueto employment injury

6. Funeral Expenses to a person who performs the lastrites of IP


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Medical Benefit

Medical Benefit means Medical care of IPs (Insured Persons)andtheir families, wherever covered for medical benefit.The Standard medical care consists of out-door treatment, in-

patient treatment, all necessary drugs and dressing, pathological

and radiological specialist consultation and care, ante-natal and post natal care, emergency treatment etc.,Insured worker and members of his family are eligible for medicalcare from the very first day of the worker coming under ESIScheme.

A worker who is covered under the scheme for first time is eligiblefor medical care for the period of three months. If he/shecontributes at least for 78 days in a contribution period theeligibility is there up to the end of the corresponding benefit

period.


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Sickness Benefit

Sickness signifies a state of health necessitating Medical treatment andattendance and abstention from work on Medical grounds. Financial

support extended by the corporation is such a contingency is calledsickness BenefitSickness Benefit represents periodical payments made to an Insured

Person for the period of certified sickness after completing 9 Months ininsurable employment.

To qualify for this benefit, contributions should have been payable for atleast 78 days in the relevant contribution period.The Maximum duration for availing sickness Benefit is 91 days in twoconsecutive benefit periods


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Extended Sickness Benefit

Extended Sickness Benefit is a Cash Benefit paid for prolonged illness (Tuberculosis / Leprosy, Mental andMalignant diseases) due to any of the 34 Specified diseasesThe IP should have been in continuous employment for a

period of 2 years and should have contributed for at least156 days in 4 preceding contribution periodsThe daily rate of Extended Sickness Benefit is 40% morethan the standard Sickness Benefit rate admissible.After exhausting sickness Benefit Payable for 91 days theExtended Sickness Benefit is payable up to further period of 124 / 309 days that can be extended up to 2 years in specialcircumstances


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Enhanced Sickness Benefit

Is Cash Benefit for IP undergoing sterilizationoperation of vasectomy / tuberctomy for family planning.

The contributory conditions are the dame as for claiming sickness benefits

The daily rate of this benefit is double the standard benefit rate. Say, not less than the daily wage.

The benefit is available up to 7 days for vasectomy andup to 14 days for tubectomy operations.


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Maternity Benefit

Maternity Benefit is cash payable to an Insured women for the specified period of abstention from work for confinement or mis-carriage or for sickness arising out of

pregnancy, confinement premature birth of child or miscarriage confinement connotes labor after 26 weeksof pregnancy whether the result issue is alive or dead.

Miscarriage means expulsion of the contents of a pregnant uterus at any period prior to or during 26 th week of pregnancy.


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Criminal abortion or miscarriage does not,however, entitle to benefit.The contribution condition is the same as for

Sickness Benefit.The daily benefit rate is double the sicknessBenefit rate and is thus roughly equivalent to

the full wages. Benefits is paid for Sundaysalso.

Maternity Benefit


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Maternity Benefit

For sickness arising out of pregnancy,confinement, P remature birth of child ormiscarriage : For an additional period or up to four weeks.

In all the cases, the benefit is paid only if theinsured women does not work for remunerationduring the period for which benefit is claimed. Thereis no waiting period.


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Medical BonusMedical Bonus is lump sum payment made toan Insured woman or the wife of an insures

person in case she does not avail medicalfacility from an ESI hospital at the time of delivery of a child. This bonus of Rs. 250/- has

been increased to Rs. 1000/- from 1st

April200 3

Maternity Benefit


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Disablement Benefit

a). Temporary disablement benefit :

In case of temporary disability arising out of anemployment injury or occupational disease.

Disablement benefit is admissible to insured person for the entire period so certified by an Insurance Medicalofficer / Practitioner for which IP does not work for wages.The benefit is not subject to any contributory conditionand is payable at a rate which is not less than 70% of daily average wages.


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b). P ermanent disablement benefit

In case an employment injury or occupational diseaseresults in permanent, partial or total loss of earning capacity.

Periodical payments are made to the IP for life at a ratedepending on the actual loss of earning capacity as may bedetermined and certified by a duly-constituted MedicalBoard.The rates of Disablement Benefits are determined in

accordance with the provisions of Rule 57 of ESI (Central)Rules, 1991.In order to product erosion in real value of the periodical

payments of Permanent Disablement benefits, against risein the cost of living index, periodical increases are granted,

based on actuarial calculation .


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Dependants Benefit

Dependents Benefit is a monthly pension payable to the

eligible dependents of an insured person who dies as a resultof an Employment Injury or occupational diseaseBeneficiaries and Duration of benefita). Widow / widows during life or until remarriage

b). Legitimate or adopted son until age 18 or if legitimateson is infirm, till infirmity lasts.c). Legitimate or adopted unmarried daughter until age 18 or until marriage, whichever is earlier, or if infirm, tillinfirmity lasts and she continues to be unmarried.


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In the absence of any widow or legitimate child, the benefit ispayable to a parent or grandparent for life, to any other maledependent until age 18 or to an unmarried or widowed femaledependent until age 18.The total divisible benefit is equivalent to the temporarydisablement benefit rate (roughly 70% of the wage rate). The

widow / widows share 3 /5 th of the benefit and the legitimate oradopted son and daughter 2/5 th each of the benefit. If the totalbenefit so divided exceeds the full rate, there is a proportionatereduction in the respective shares of the beneficiaries.The amount of pension paid to the dependents of a deceasedinsured person is reviewed vis--vis the cost of living index andincreases are granted from time to time to compensate forerosion in its real value.

Dependants Benefit


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Funeral Expenses

Funeral Expenses are in the nature of lumpsum payment up to a maximum of Rs.2500/-made to defray the expenditure on the funeral

of deceased IP. The amount is paid either tothe eldest surviving member of the family or, inhis absence, to the person who actually incursthe expenditure on the funeral.


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P enalties

Punishment for false statement s[Section 84]The purpose of avoiding any payment to be made by himself under this Act or enabling any other person to avoid any such payment,knowingly makes or causes to be made any false statement, shall be

punishable with imprisonment for a term of 6months, or with finenot exceeding Rs.2000, or with both.

Provided that where an insured person is convicted under this

section, he shall not be entitled for any cash benefit under this Actfor such period as may be prescribed by the central Government.


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Punishment for failure to pay contribution[Section 85]

1.Section 85(a): Fails to pay any contribution which under this Act he is liable to pay.

2.Section 85(b): Deducts or attempts to deduct from thewages of an employee the whole or any part of theemployers contribution.

3.Section 85(c): In contravention of section 72 reduces the

wages or any privileged or benefits admissible to anemployee.


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4.Section 85(d): In contravention of section 73 or anyregulation dismisses, discharges, reduces or otherwise

punishes an employee.5.Section 86(e): Fails or refuses to submit any return

required by the regulations, or makes a false return.6. Section 85(f): Obstructs any inspector or other official

of the Corporation in the discharge of his duties.7. Section 85(g): Is guilty of any contravention of or non

compliance with any of the requirements of this Act or the rules or the regulations in respect of which nospecial penalty is provided.


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