Labour Legislation and ESI Act Knowledge
What this domain tests
Labour legislation and the ESI Act decide the SSO shortlist. Expect questions on the ESI Act 1948's applicability, definitions and benefits, and on allied statutes: Factories Act 1948, Minimum Wages Act 1948, Payment of Wages Act 1936, Payment of Bonus Act 1965, Maternity Benefit Act 1961, Industrial Disputes Act 1947, Trade Unions Act 1926, EPF & MP Act 1952 and the four Labour Codes of 2019–2020.
ESI essentials
- Applicability: factories using power with 10 or more persons (20 without power), and other establishments with 10 or more; employees drawing wages up to ₹21,000 a month (₹25,000 for persons with disability).
- Contributions: employee 0.75% and employer 3.25% of wages.
- Contribution period: 1 April–30 September and 1 October–31 March; the matching benefit period begins three months later.
- Benefits: sickness (70% of average daily wages, up to 91 days), maternity (100% of average daily wages, 26 weeks), disablement (90%), dependants' pension (90%), medical, funeral (₹15,000), plus extended sickness and rehabilitation.
- Qualifying condition: at least 78 days of contribution in the relevant contribution period for sickness and maternity benefit.
Worked example
An employee's monthly wages are ₹18,000. Is she covered, and what is remitted? ₹18,000 is below the ₹21,000 ceiling, so she is an insured person from the start of the contribution period. Employee share 0.75% = ₹135; employer share 3.25% = ₹585; total ₹720 a month. Contract labour engaged through an immediate employer is also covered, and the principal employer must pay if the contractor defaults.
Traps
Confusing contribution and benefit periods; applying the ₹25,000 disability ceiling to everyone; thinking ESI covers only factories; quoting maternity benefit at 12 weeks instead of 26; and muddling ESI's 90% disablement rate with the Employees' Compensation scale.