11 June 2019
Amendment- Employee State Insurance Corporation
Via draft rules called the Employees’ State Insurance (Central) (Amendment) Rules, 2019 published on 15th February 2019 by the Ministry of Labour and Employment, Govt. of India has notified the draft of proposed revised/ reduced rates of Employee’s State Insurance (“ESI”) Contribution in respect of Employer Contribution which will be applicable from the 1st of July, 2019. The total contribution towards ESI was reduced from 6.5% of an employee’s wages to 4% with the employer’s share cut to 3.25% from 4.75% of the wages, from 1.75%. The move is speculated to benefit 3.6 crores employees and 12.85 lakh employers in terms the statement made by the Ministry of Labour and Employment. This is set to substantially reduce the financial liability on employers leading to improved viability of establishments, increased ease of doing business and improved compliance with the Act in terms of the statement of the Government.