India: Major social security benefits under ESIC and EPF in light of covid-19 and other employment related updates


published on 9 June 2021 | reading time approx. 3 minutes



Labour Ministry announces major social security relief under ESIC and EPFO schemes to dependents of workers passing away due to covid-19

On 30 May 2021, Ministry of Labour & Employment released a press release which announced additional benefits for workers covered under Employees’ State Insurance Corporation (ESIC) and under the Employees’ Provident Fund Organization (EPFO) Schemes to provide financial relief to dependents/ family members of workers died due to covid-19, without any additional cost to the employer.

The Employees’ State Insurance Act, 1948 (ESI Act) is enacted with an objective to provide social security benefits to employees such as sickness, maternity, medical benefit and dependents’ benefits – incase of death or disablement due to an employment injury or occupational hazards. 
Currently under as per section 52 of the ESI Act read with provision of 6(A) of Section 2 of ESI Act, the dependent’s benefit is payable to the dependents of deceased employee insured under ESI Act (Insured Person ) only where such an Insured Person has died as a result of employment injury or occupational hazards. 
However, on 30 May 2021, the Indian Labour Ministry has announced that dependent’s benefit as per section 52 of the ESI Act read with provision of 6(A) of Section 2 of ESI Act will be extended to dependents of deceased Insured Person where such death is due to covid-19. Provided this dependent’s benefit will be available only in case if such an Insured Person has been registered on the online portal of the ESIC prior to his /her diagnosis of covid disease and which has resulted in his death. Accordingly such dependent family members will be entitled to receive the dependent’s benefit in the same scale as received by the dependents of Insured Person died as a result of employment injury. The dependent’s benefit will be received in the form of pension equivalent to 90 per cent of the average daily wage drawn by the insured person as per the existing rules.
However, there are certain eligibility conditions subject to fulfillment of which this benefit can be availed by the dependent deceased Insured Person which are as follows:

  1. The Insured Person must have been registered on the ESIC portal at least 3(three) months prior to the diagnosis of covid disease resulting in death;
  2. The insured Person must have been employed for wages and contributions for at least 78 days should have been paid or payable in respect of deceased Insured Person during a period of 1 (one) year immediately preceding the diagnosis of covid-19 disease resulting in death.

The Insured persons, who fulfill the eligibility conditions as mentioned above and have died due to covid disease, their dependents will be entitled to receive dependent’s benefit under the ESI Act. This benefit has brought into force retrospective effect from 24 March 2020. 
Further in addition to above, certain benefits have been announced under the Employees’ Provident Funds & Miscellaneous Provisions Act (EPF) under the EPFO Schemes. Under the EPFO’s Employees’ Deposit Linked Insurance (EDLI) Scheme all surviving dependent family members of the members of this scheme are eligible to avail benefits of EDLI in case of death in harness of the member. At present under this scheme, the benefits extended in case of death of a worker are no requirement of minimum service for payment of gratuity, family pension is paid as per provisions under EPF Act, sickness benefit of 70 per cent of wages for 91 days in a year is paid in the event of worker falling sick and not attending office. A notification issued by the Ministry has made following amendments to this:

  1. Amount of maximum benefit has been increased from INR 6,00,000 to 7,00,000 to the family members of deceased employee;
  2. Minimum assurance benefit of INR 2,50,000 to eligible family members of deceased employees who was a member for a continuous period of 12 months in one or more establishments preceding his death in place of existing provision of continuous employment in the same establishment for 12 months. It will benefit contractual/casual labourers were losing out on benefits due to condition of continuous 1 (one) year in 1 (one) establishment;
  3. Restoration of provision of minimum INR 2,50,000 compensation retrospectively, i.e. from 15 February 2020.

These welfare measures will provide the much needed support to the families of workers who have died due to the covid-19 disease and will protect them from financial hardships in these challenging times of pandemic.

EPFO allows its members to avail second covid-19 advance

In view of second wave of covid-19, in order to render support to the member/employees under the EPF Act, EPFO has allowed its members to avail second non-refundable covid-19 advance.
An amendment to this effect was made by Ministry of Labour & Employment in Employees’ Provident Funds Scheme, 1952 (EPF Scheme) by inserting therein sub-para (3) under paragraph 68L, through notification in the Official Gazette. Under this provision, non-refundable withdrawal to the extent of the basic wages and dearness allowances for three months or up to 75 per cent of the amount standing to member's credit in the EPF account, whichever is less, is provided. Members can apply for lesser amount also. Members who have already availed the first covid-19 advance can now opt for a second advance and the provision and process for withdrawal of second covid-19 advance is same as in the case of first advance.
Further, EPFO has communicated that efforts will be made towards settling the claims for second covid-19 advance within 3 (three) days of their receipt of such request as against the statutory requirement to settle the claims within 20 days. For the said purpose EPFO has deployed a system driven auto-claim settlement process in respect of all such members whose KYC requirements is complete in all respects.

Central Government Issues Advisory to State Governments/UTs to Encourage Work-from-Home for Nursing Mothers

As a part of latest measure taken to protect the interest of workers specifically nursing mothers at work during the ongoing covid-19 pandemic, the Central Government- Labour Ministry has issued an advisory to all the State Governments/Union Territories (UTs) to encourage work-from-home for nursing mothers under the enabling provision for permitting work from home for nursing mothers under the Section 5(5) of the Maternity Benefit (Amendment) Act, 2017 (The Amendment Act). The Amendment Act provides that where the nature of work assigned to a woman is of such nature that she may work from home, the employer may allow her to do so after availing of the maternity benefit for such period and on such conditions as the employer and the woman may mutually agree. The State Governments and UTs have been further requested that advisories may be issued to the employers for allowing more and more nursing mothers to work from home as per section 5(5) of the Amendment Act wherever nature of work so allows. It has been conveyed that employers may be advised to allow work-from-home, wherever nature of work so allows , for nursing mothers at least for a period of 1 (one) year from the date of birth of the child.

The Central Labour Ministry has notified section 142 of the Social Security Code, 2020

With effect from 3 May, 2021, the Ministry of Labour and Employment has notified section 142 of the Social security Code, 2020.
The section 142 of the Social Security Code, 2020, covers the applicability of Aadhaar and states that an employee or unorganized worker or any other person, as the case may be, for— (a) registration as member or beneficiary; or (b) seeking benefit whether in kind, cash or medical sickness benefit or pension, gratuity or maternity benefit or any other benefit or for withdrawal of fund; or (c) availing services of career centre; or (d) receiving any payment or medical attendance as Insured Person himself or for his dependents, under this Social Security Code or rules, regulations or schemes made or framed thereunder, shall establish his identity or, as the case may be, the identity of his family members or dependents through Aadhaar. Provided that any foreigner employee shall obtain and submit Aadhaar number for establishing his identity, as soon as possible, on becoming resident within the meaning of clause (v) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016. 
It is pertinent to note that while notifying this section, it has been announced that National Data Base for unorganized workers (NDUW) is at an advanced stage of development by National Informatics Centre. The portal is aimed at collection of data for unorganized workers including migrant workers for the purpose of giving benefits of the various schemes of the Government. An inter-state migrant worker can register himself on the portal on the basis of submission of Aadhar alone. 
Further Ministry of Labour and Employment has clarified that this section 142 under the Social Security Code has been notified only for collection of data of workers including migrant workers. No benefit will be denied to workers for want of Aadhar.

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