ESIC relaxes Unemployment Scheme norms

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The Employees’ State Insurance Corporation (ESIC) administers the ESI scheme which is a self- financing health insurance scheme for the formal sector workers in India. It provides financial assistance to compensate the loss of wages during a period of abstention from work due to sickness, maternity and employment injury. The scheme provides medical care to family members also.

The Statutory Corporate body has members representing Employers, Employees, the Central Government, State Government, Medical Profession and the Hon’ble Members of Parliament. The scheme is primarily built out of contribution from employers and employees who contribute a fixed percentage of wages monthly. The State Governments bear 1/8th share of the cost of medical benefit. Establishments or factories employing 10 or more persons are eligible for this scheme.

For the workers under the ESI scheme, a relief to the extent of 25% of the average per day earning during the previous four contribution period, is paid up to a maximum of 90 days of unemployment once in a lifetime.

The relaxed norms of the Unemployment Scheme

The Government has now relaxed the norms, so that ESIC will give 50 per cent of average wages for a maximum period of 90 days of unemployment till this calendar year-end as compared to the previous 25%. This allowance will be paid to those who have lost jobs between March 24th and December 31st this year due to the CoVid-19 pandemic. The employees can claim their payment for any 3 months (90 days) between the period of March 24, 2020 and December 31, 2020. The scheme has also been extended for the duration of one more year up to June 30, 2021. After December 31st, 2020, the scheme will be available with original eligibility condition between January 1, 2021 and June 30, 2021.

The workers should have insurable employment for a minimum for 2 years before their unemployment and should have contributed for at least 78 days in the contribution period before their unemployment and a minimum of 78 days in one of the remaining 3 contribution periods in 2 years prior to their unemployment.

This relaxation on the unemployment allowance is said to benefit around 40 lakh employees.