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New Labour Code: Unorganised workers to get benefits of State Insurance Scheme

by Rishika Choudhury

Date & Time: Jul 05, 2022 12:57 PM

Read Time: 2 minute




The four new labour codes new wage code on wages, social security, industrial relations, and occupation safety, health and working conditions are soon going to become a reality. Once implemented under the social security code, the Employees' State Insurance Scheme of India (ESIC) will be made available to workers in the unorganised sector as well.

What Is ESIC?

The ESIC Scheme, which is administered by a statutory corporate body called the Employees’ State Insurance Corporation, provides full medical care to the employee registered under the ESI Act, 1948 during the period of his incapacity, restoration of his health and working capacity. It provides financial assistance to compensate the loss of his/ her wages during the period of his abstention from work due to sickness, maternity and employment injury. The scheme provides medical care to his/her family members also.
The ESI scheme is a self-financing scheme. The ESI funds are primarily built out of the contribution from employers and employees payable monthly at a fixed percentage of wages paid. The State Governments also bear 1/8th share of the cost of medical benefit. Through a small contribution, the benefit of free treatment is available under hospitals and dispensaries of ESIC. Currently, it’s available for the organised sector workers only.
After retirement also, an Insured person who superannuates or retires under a voluntary Retirement Scheme or takes premature retirement, after being an insured person for not less than 5 years, shall be eligible to receive medical benefit for himself and his spouse subject to production of proof thereof, and payment of a nominal contribution of rupees one hundred and twenty for one year. In case the insured person expires his spouse shall continue to receive medical benefit on the payment of contribution.

ESIC and the New Social Security Code

The doors of ESIC will now be open to workers from all sectors, as well as workers from the unorganised sector, under the new labour codes. ESIC hospitals, dispensaries, and branches are being expanded to the district level. This service will be expanded from 566 districts to all 740 districts in the country.
Under the code, even if a single worker is engaged in hazardous work, he would be given ESIC benefit. Gig workers engaged in new technology will also be given an opportunity to join ESIC. Apart from this, plantation workers will also get benefits of the ESIC. Institutions operating in dangerous environments will be required to register with the ESIC.

Other New Benefits of Social Security Code

The pension scheme benefit (EPFO) will be available to all workers in the organised, unorganised, and self-employed sectors. To provide comprehensive social security to the unorganised sector, a social security fund will be established. According to the new code, the requirement of minimum service for payment of gratuity has been removed in the case of fixed-term employees.
Employees engaged on fixed term will also get same social security benefit as permanent employees, and a national database of workers of the unorganised sector will be created through registration on a portal.

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