Govt to offer 50% of three months’ salary as unemployment benefit due to their job loss between March 24 and 31 December 2020.

The union government Thursday relaxed norms to offer almost 4 million industrial workers 50% of their three months of salary as unemployment benefit due to their job loss between March 24 and 31 December 2020.

The proposal was approved at the Employees State Insurance Corporation (ESIC) board headed by the union labour minister Santosh Gangwar. The ESIC has calculated that the move will benefit some 4.1 million beneficiaries in the March to December 2020 period. ESCI is a social security organization under the union labour ministry.

“The move will give cash benefits equivalent to 50% of the last drawn average wage to eligible insured persons (IP) under ESIC for three months," said Amarjeet Kaur, a board member of the ESIC after the meeting over a phone interaction.

Kaur said the decision was approved and it will benefit a segment of the workers but had they relaxed this eligibility criteria a bit more, may be more than double (above 7.5 million) workers would benefited.

Industrial workers with a monthly earning up to ₹21,000 fall under the ambit of the ESIS scheme and ever month a portion of their salary is deducted and deposited with the ESIC to medical benefits from primary to tertiary facilities. These workers are called IPs. Currently, an IP pays 0.75% of the basic salary and 3.25% is given by the employer to the ESIC kitty.

As per the board decision, the claim of the IPswill no more be required to come from the employers “The claim may be submitted directly in the ESIC branch office and the verification of the claim with the employer will be done at the branch office level. The payment shall be made in the bank account of the IPs directly," as per the agenda of the meeting.

Relief shall become due for payment 30 days from the date of unemployment now as against 90 days earlier. The 12 digit Aadhaar number shall be used for identification of the claims. This will be done via the Atal Beemit Vyakti Kalyan Yojana, a scheme in place since announced in 2018, which had a provision to give 25% unemployment benefit but had technical hindrances.

As per ESIC documents, an industrial workers registered under the ESIC, should have been in “insurable employment for a minimum period of two years immediately before his/ her unemployment and should have contributed for not less than 78 days in the contribution period (six months) immediately preceding to unemployment, and minimum 78 days in one of the remaining three contribution periods in two years prior to unemployment."

V. Radhakrishnan, another board member of the ESIC and a national executive committee member of the Bharatiya Mazdoor Sangh (BMS) affiliated to the ruling BJP said the decision will be benefit a sizable portion of workers who have either lost jobs are will lose jobs in the next few months due to the impact of the pandemic.

Nearly 80 lakh people are estimated to have existed the ESIC scheme in the past few months due to the pandemic’s impact on businesses. “The initial calculation based on certain rules shows that around 40 lakh will be eligible to get the benefit from ESIC board decision. This will cost the government to the tune of Rs.6700 crore," Radhakrishnan said.

A labour ministry spokesperson said a formal statement from the ministry is awaited.