The Government of India has taken a historic decision to reduce the rate of contribution under the ESI \u200eAct from 6.5% (4.75% +1.75%) to 4% (3.25%+0.75%). Employers\u2019 contribution being reduced from \u200e\u200e4.75% to 3.25% and employees\u2019 contribution being reduced from 1.75% to 0.75%. Reduced rates will be \u200eeffective from 01.07.2019. This would benefit 3.6 crore employees and 12.85 lakh employers.\u200e<\/p>\n\n\n\n
The reduced rate of contribution will bring about a substantial relief to workers and it will facilitate \u200efurther enrollment of workers under the ESI scheme and bring more and more workforce into the \u200eformal sector. Similarly, reduction in the share of contribution of employers will reduce the financial \u200eliability of the establishments leading to improved viability of these establishments. This shall also lead \u200eto enhanced Ease of Doing Business. It is also expected that reduction in rate of ESI contribution shall \u200elead to improved compliance of law.\u200e<\/p>\n\n\n\n
The Employees\u2019 State Insurance Act 1948 (the ESI Act) provides for medical, cash, maternity, disability \u200eand dependent benefits to the Insured Persons under the Act. The ESI Act is administered by \u200eEmployees\u2019 State Insurance Corporation (ESIC). Benefits provided under the ESI Act are funded by the \u200econtributions made by the employers and the employees.\u200e<\/p>\n\n\n\n
Under the ESI Act, employers and employees both contribute their shares respectively. The \u200eGovernment of India through Ministry of Labour and Employment decides the rate of contribution \u200eunder the ESI Act. \u200e<\/p>\n\n\n\n
The Government of India in its pursuit of expanding the Social Security Coverage to more and more \u200epeople started a programme of special registration of employers and employees from December, 2016 \u200eto June, 2017 and also decided to extend the coverage of the scheme to all the districts in the country in \u200ea phased manner. The wage ceiling of coverage was also enhanced from Rs. 15,000\/- per month to Rs. \u200e\u200e21,000\/- from 01.01.2017.\u200e The Government of India has taken a historic decision to reduce the rate of contribution under the ESI \u200eAct from 6.5% (4.75% +1.75%) to 4% (3.25%+0.75%). Employers\u2019 contribution being reduced from \u200e\u200e4.75% to 3.25% and employees\u2019 contribution being reduced from … Continue reading
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Socio Research & Reform Foundation (NGO) <\/strong>
\u200e512 A, Deepshikha, 8 Rajendra Place, New Delhi \u2013 110008\u200e<\/p>\n","protected":false},"excerpt":{"rendered":"