Page 96 - DMGT306_MERCANTILE_LAWS_II

Unit 5: The Employees’ State Insurance Act, 1948: Adjudication, Benefits, and Penalties under the Act

Under Regulation 31-A, the employer is liable to pay interest at the rate of 6 per cent per annum Notes
for each day of default or delay in the payment of his contribution. In addition, under Section
85-B of the Act, the Corporation is empowered to recover damages from the employer who fails
to pay the contribution or delays payment. The amount of damages, however, cannot exceed the
amount of contribution. The damages can also be recovered as arrears of land revenue.
Different punishment have been prescribed for different types of offences in terms of Section 85:
(i) (six months imprisonment and fine 5000), (ii) (one year imprisonment and fine), and 85-A:
(five years imprisonment and not less to 2 years) and 85-C (2) of the ESI Act, which are
self-explanatory. Besides these provisions, action also can be taken under section 406 of the IPC
in cases where an employer deducts contributions from the wages of his employees but does not
pay the same to the corporation which amounts to criminal breach of trust.

!
Caution The accident may occur within or outside the territorial limits of India. However,
there should be a nexus or casual connection between the accident and employment. The
place or time of accident should not be totally unrelated to the employment.

Self Assessment

Fill in the blanks:
13. There are ............................. pension formulas.

14. ............................ is an establishment belonging to the class of industries/other
establishments, which have been listed in the schedule appended to the Employees’
Provident Fund and Miscellaneous Provisions Act, 1952 and where 20 or more persons are
employed.
15. Suppose member has not nominated anyone, the amount will be paid to ...........................
or ........................... as the case may be.



Case Study Paying Employee Health Claims Out-of-Pocket

J ohn Schmitt opted to self-fund his employees’ medical claims, and saw his company
health insurance costs drop 20 percent.

John Charles Schmitt II, who heads up Plans for Professionals, a 300-person life insurance
firm in Orange, Connecticut, used to work with Connecticut Blue Cross and Blue Shield to
cover his employee health insurance costs.
But as premiums rose and new healthcare guidelines started to come into effect, even
Schmitt—who played ten football seasons with the Jets, won the 1969 Super Bowl with
quarterback Joe Namath and had 16 operations due to football injuries—became nervous.
“Our experience was tough. I didn’t like it. We were just a number,” he says.
What’s more, when Schmitt’s young grandson, John Charles IV or “Charlie”—who was
covered under Plans for Professional’s medical policy because his father is a Vice President
there—battled leukemia from 2004 to 2010, Schmitt saw millions of dollars in claims pile
up. He realized his company’s health insurance package had to change.
Contd....

LOVELY PROFESSIONAL UNIVERSITY 91