Employees’ State Insurance Fund

TANMOY MUKHERJI INSTITUTE OF JURIDICAL SCIENCE

Dr. Tanmoy Mukherji

Advocate

Employees’ State Insurance Fund-

Tanmoy Mukherji

Advocate

Sections 26–29, ESI Act, 1948

1. Meaning of Employees’ State Insurance Fund

→The Employees’ State Insurance Fund is a statutory fund created under Section 26 of the Employees’ State Insurance Act, 1948.

→All contributions and income under the Act are credited to this Fund, which is used exclusively for providing benefits to insured employees and their families.

2. Object of the ESI Fund-

3. Sources of the ESI Fund (Section 26)

The ESI Fund consists of the following:

→Employer’s Contribution

→Paid by the employer at the prescribed rate.

→Employee’s Contribution

→Deducted from the wages of employees.

→Contributions from Central and State Governments

→Grants and financial assistance.

→Fines and Penalties

→Collected for violations of the Act.

→Interest and Other Income

→Income from investments made by ESIC.

4. Contribution to the ESI Fund (Section 39)-

Contributor	Rate of Contribution
Employer	3.25% of wages
Employee	0.75% of wages

→Contribution is payable for every wage period.

→Employees earning ?176 per day or less are exempted from employee contribution.

→Employer must pay both shares and later recover employee’s share from wages.

5. Administration of the ESI Fund-

→The Fund is administered by the Employees’ State Insurance Corporation (ESIC).

→ESIC is a statutory body constituted under Section 3.

6. Utilisation of the ESI Fund (Section 28)

7. Investment of the ESI Fund (Section 29)-

→The ESIC may invest surplus money of the Fund.

→Investments are made as per rules framed by the Central Government.

→The object is to ensure safety and growth of the Fund.

8. Nature of the ESI Fund-

9. Importance of the ESI Fund-

The Employees’ State Insurance Fund is the financial backbone of the ESI Act, 1948. By pooling contributions from employers, employees, and governments, it ensures comprehensive medical and cash benefits, thereby fulfilling the constitutional goal of a welfare state.