The Union Labour Secretary’s recent pronouncement negates the diversion of funds from the Employees’ State Insurance Corporation (ESIC) to cover worker wages or assist employers during the Covid-19 lockdown. The ministry is also eager to present reports on the Code on Industrial Relations and the Code on Social Security, as suggested by the Parliamentary Standing Committee on Labour. There is a push to streamline the existing Central labour laws into four concise Labour Codes. These codes are designed to secure wages, ensure social security, and provide safety, health, and grievance resolution for workers.
The Four Labour Codes
Labour legislation in India is being restructured to integrate and simplify the multitude of present Central labour laws. This will result in four distinct but comprehensive Labour Codes – Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions. The collective aim of these codes is to create a more agreeable work environment providing wage security, effective social security, better safety protocols, medical benefits, and redressal systems.
Understanding Employee’s State Insurance Corporation (ESIC)
A critical element in the Indian social security structure is the Employees’ state Insurance Corporation (ESIC). It is a versatile social system extending socio-economic protection not only to the workforce but also to their dependents or families covered under the ESI scheme.
Employees’ State Insurance (ESI) Scheme in Depth
The Employees’ State Insurance Scheme, embedded in the Employees’ State Insurance Act, 1948, is a consolidated measure of social insurance. Its primary objective is to cushion employees against life’s unforeseen circumstances like sickness, maternity complications, disablement or death from employment injury, and securing medical care for insured persons and their families.
Coverage of the ESI Scheme
The ESI scheme applies to various sectors and establishments employing 10 or more workers. These include factories, road transport, hotels, restaurants, cinemas, newspaper agencies, shops and educational or medical institutions. The threshold for coverage varies across states. Workers earning up to Rs. 15,000 a month are entitled to social security cover under the ESI Act. However, this wage ceiling has recently been increased to Rs. 21,000 by the ESI Corporation. Construction site workers in areas where the ESI Scheme is implemented have been included in its benefits since August 2015. As of today, the ESI Scheme is effective in 526 Districts spread over 34 States and Union Territories.
Contributions to the ESI Scheme
The ESI Scheme runs on contributions from both employers and employees. In June 2020, the government reduced these contribution rates; the employer’s share fell from 4.75% to 3.25%, and the employee’s from 1.75% to 0.75%. Employees earning less than Rs. 137 a day are exempted from paying their share of the contribution.
