Coverage – Areas, Organizations and Employees
Originally ESIC Act was only applicable to non-seasonal industries (or factories) utilizing power providing employment to 20 or more individuals. But with the passage of its implementation, the provisions of this Act were modified to extend the coverage to Non-seasonal power using industries (or factories) providing employment to 10 or more individuals along with Non-power using industries (or factories) providing employment to 20 or more individuals.
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons.
The existing wage-limit for coverage under the Act, is Rs.10,000/- per month (with effect from 1.10.2006).
Areas covered under the Act
The ESIC Scheme is being implemented in various phases area-wise across India. The Scheme has already been implemented in different areas in various States/Union Territories across India except in states like Arunachal Pradesh, Manipur, Mizoram, Nagaland, Tripura and Sikkim.
Coverage of Factories
The Act is applicable to all non-seasonal factories that utilize power providing employment to 10 or more individuals as well as factories not utilizing power employing 20 or more individuals for wages on any day in areas wherein ESIC Act has been implemented. There is an amendment to the Act under Section 1(5) to extend the benefits to other classes of establishment – agricultural, commercial, industrial or otherwise. The provisions of this Act have been extended by majority of the State Governments in India to the following class of establishments such as shops, hotels, restaurants, cinemas road-motor transport agencies, newspaper agencies, workshops, establishments employing 20 or more individuals.
In case, at any stage or in due course of time, if the number of employees working with an establishment or factory covered under the ambit of this Act falls short of the stipulated number of 10 or 20 employees as specified, ceases to be a beneficiary of ESIC Act without any aid of power. However, this Act is not applicable to workers engaged in mining operations, railway running sheds and certain seasonal/temporary factories operating for less than 7 months in a calendar year. The employees of establishments or factories run with the aid of Central or State Governments who are in receipt of social security benefits that are substantially similar or superior as compared to those provided under this Act can be exempted from coverage.
Coverage of Employees
The Central Government of India has issued guidelines pertaining to monthly wage limit that has been prescribed for the purpose of coverage of employees/workers of the factories or establishments covered under this Act. Under Section 2(9) of this Act, an employee has been defined as any individual employed for wages in connection with the work related to a factory or establishment which is a beneficiary under ESIC Act. The wage ceiling is revised from time to time. The existing wage ceiling effective from 1.10.2006 is Rs.10,000/- per month.