Dear Prabhar, It is very difficult for any company to provide the benefits offered by ESI. In fact, the ESI Act includes provisions for exemption from the ESI Act in the following cases:
i) Exemption for a certain class of factories/establishments,
ii) Exemption for a certain class of employees, and
iii) Exemption for certain provisions of the ESI.
The first point that the ESI Exemption committee will consider is whether the employer is providing benefits equal to or superior to those of ESI. However, no company will provide benefits equal to or greater than ESI. Only public sector companies provide benefits equal to or superior to ESI for regular employees. Some of the main benefits provided by ESI include:
i) Sickness Benefit: An insured person is entitled to 91 days of leave in one year with approximately 60% of their wages, in addition to medical/hospital benefits.
ii) Enhanced Sickness Benefit: In the case of family planning procedures like Tubectomy/vasectomy, the insured person/women are entitled to a cash benefit equal to or more than their wages, in addition to medical/hospital facilities.
iii) Extended Sickness Benefit: In the case of certain long-term diseases like TB/Heart diseases, the medical benefits will be extended to 3 years regardless of employment status, and cash benefits will be extended up to 2 years if the insured person has 2 years of insurable employment.
iv) Disablement Benefit: In the event of an injury/accident at the workplace or on the way to/from work, the insured person is entitled to temporary disablement benefit, which is nearly 80% of their wages without a limit on the duration. If there is a permanent loss of earning capacity due to an injury, such as the loss of a body part, the insured person will receive a lifelong pension based on medical board recommendations, irrespective of their continued employment status. In case of death due to a work-related injury, the pension will be paid to dependents, such as the wife until remarriage, children up to 21 years, or widowed mother.
v) Maternity Benefit: An Insured Woman who completes 9 months of service under ESI coverage and works for wages for 70 days in the relevant contribution period will receive 84 days of maternity benefit at a rate higher than her wages, along with medical/hospital facilities.
Apart from these benefits, insured persons/women are entitled to funeral expenses, super-specialty treatment, and unemployment allowances in cases of job loss due to retrenchment, subject to certain terms and conditions.
ESI is establishing many medical/nursing institutions nationwide, making it possible for employees to fulfill their dream of seeing their children become doctors. ESI provides a percentage of reservation for the children of insured persons, a benefit that seemed unimaginable before.
Due to the multitude of benefits provided by ESI, it is challenging for companies to afford them, making it highly difficult to obtain exemptions.
I hope I have clarified any doubts among our HR friends regarding ESI. If you have any queries or doubts, please do not hesitate to call me at [Phone Number Removed For Privacy Reasons] or write to [Email Removed For Privacy Reasons].
Regards