States request use of ESI fund for wages amid lockdown; Labour secretary rules out funding

To cover wages or part of wages for employees during extended Coronavirus lockdown, a group of industries and a few states have written to Union Ministry of Labour and Employment to allow use of funds collected under ESI or Employees’ State Insurance (ESI) scheme.

Employers facing difficulties in paying wages

According to media reports, industries mostly in micro, small and medium sector, have pointed out that ongoing COVID-19 pandemic is an extraordinary situation, and employers are facing difficulties in paying wages even as ir establishments are shut which is hurting ir revenue generation. States like Punjab and Himachal Presh have raised issue of allowing ESIC funds for payment of wages. 

However, Labour Secretary Heeralal Samariya on Wednesday ruled out appropriating funds of Employees' State Insurance Corporation (ESIC) for payment of wages to workers or to employers to meet ir salary bill during Coronavirus lockdown.

Earlier this month, a labour ministry spokesperson h also denied any such move to appropriate funds of ESIC and Employees' Provident Fund Organisation (EPFO) to give relief to workers under Prhan Mantri Garib Kalyan Yojana or any or scheme.

'...is not at all visable'

During a webinar organised by industry body FICCI, Samariya said, "ESIC (fund) is money of insured persons and employers who are contributing (to this social security scheme). It alrey has a provision that if an employee is unemployed n 25 per cent of wages can be paid." 

"...but diverting money (of ESIC) to somebody else or paying wages is not at all visable because we want to reduce contribution furr so that it (ESI scheme) can run in a better way in future," he ded.

Central tre unions h strongly condemned idea of diverting funds of EPFO as well as ESIC for giving relief to workers under lockdown. y h demanded that government should pay for relief from its own budget rar than dipping into reserves or surplus of two social security bodies.

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ESI is a self-financing health insurance scheme for workers in formal sector and offers compensation in form of cash up to three months of unemployment. social security scheme offers full medical care to insured person and his or her family with no ceiling on expenditure on treatment.

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