Page 224 - DCOM207_LABOUR_LAWS

Unit 13: The Employees’ State Insurance Act, 1948

Notes

Notes As soon as the above conditions are fulfilled the employer should furnish the
details in Form-01 to ESI office for registration under the ESI Act, 1948 and Obtaining of
the employer’s Code No.

13.3.1 Wage Ceiling for Coverage

The monthly wage limit for coverage under the ESI act would be such as prescribed by the central
government in the ESI Central Rules, 1950. The existing wage ceiling for coverage excluding
remuneration for over-time work is ` 6500 per month rule 50 of ESI Central Rules, 1950. An
employee who is covered at the beginning of a contribution period shall continue to remain
covered till the end of that contribution period notwithstanding the fact that his wages may exceed
the prescribed wage ceiling at any time after the commencement of that contribution period.
Wage ceiling for purpose of coverage is revised from time to time by the central government on
the specific recommendation of the corporation, at present the corporation has recommended for
the increase of the wage limit to ` 10,000 and its implementation is awaited.

13.3.2 Coverage

With the implementation of ESI scheme, at just two industrial centres in 1952, namely
kanpur and Delhi, there was no looking back since then in terms of its geographic reach and
demographic coverage. Keeping pace with the process of industrialization, the scheme today
stands implemented at over 679 centres in 25 states and union territories. The Act now applies
to 230 thousand factories and establishments across the country, benefiting about 8.30 million
family units of workers in the wage brackets. As of now, the total beneficiary population stands
at about 32 million.
The Act applies, in the first instance, to, non-seasonal factories employing 10 or more persons.
The provisions of the Act are being extended area-wise by stages. The Act contains an enabling
provision under which the “appropriate government” is empowered to extend the provisions of
the Act to other classes of establishments - industrial, commercial, agricultural or otherwise. Under
these provisions most of the State Govts. have extended the provisions of the Act to new classes
of establishments namely: shops, hotels, restaurants, cinemas including preview theatres, road-
motor transport undertakings and newspaper establishments employing 20 or more coverable
employees. The Scheme has also been extended to Educational Institutions employing 20 or more
persons in Rajasthan, Bihar, Pondicherry, Jammu & Kashmir, Uttarakhand, Chattisgarh, West
Bengal, Jharkhand, Kerala, Uttar Pradesh, Andhra Pradesh, Assam, Punjab, Tamil nadu and
to Private Medical Institutions in the State of West Bengal, Rajasthan, Bihar, Kerala, Himachal
Pradesh, Uttarakhand, Andhra Pradesh, Punjab, Assam, UT Chandigarh, Jharkhand and Orissa.
As of now, employees of factories/establishments mentioned above in the implemented areas
and drawing wages (excluding overtime) not exceeding ` 15,000 per month are covered under
the Act.

Self Assessment

State whether the following statements are true or false:
7. The Act applies in the first instance to all factories using power and employing 20 or more
persons on wages.
8. The monthly wage limit for coverage under the ESI act would be such as prescribed by the
central government in the ESI Central Rules, 1960.

LOVELY PROFESSIONAL UNIVERSITY 219