Jun 142019
 

Government Reduces the Rate of ESI Contribution from 6.5% to 4%

The Government of India has taken a historic decision to reduce the rate of contribution under the ESI Act from 6.5% to 4% (employers’ contribution being reduced from 4.75% to 3.25% and employees’ contribution being reduced from 1.75% to 0.75%). Reduced rates will be effective from 01.07.2019.This would benefit 3.6 crore employees and 12.85 lakh employers.

ESIC Contribution
Existing Rate (%)
Revised Rate (%)
Employer’s Share
4.75
3.25
Employee Share
1.75
0.75
Total ESI Contribution
1.75
4.00

The reduced rate of contribution will bring about a substantial relief to workers and it will facilitate further enrollment of workers under the ESI scheme and bring more and more workforce into the formal sector. Similarly, reduction in the share of contribution of employers will reduce the financial liability of the establishments leading to improved viability of these establishments. This shall also lead to enhanced Ease of Doing Business. It is also expected that reduction in rate of ESI contribution shall lead to improved compliance of law.

The Employees’ State Insurance Act 1948 (the ESI Act) provides for medical, cash, maternity, disability and dependent benefits to the Insured Persons under the Act. The ESI Act is administered by Employees’ State Insurance Corporation (ESIC). Benefits provided under the ESI Act are funded by the contributions made by the employers and the employees.  Under the ESI Act, employers and employees both contribute their shares respectively.

The Government of India through Ministry of Labour and Employment decides the rate of contribution under the ESI Act. Presently, the rate of contribution is fixed at 6.5% of the wages with employers’ share being 4.75% and employees’ share being 1.75%. This rate is in vogue since 01.01.1997.

The Government of India in its pursuit of expanding the Social Security Coverage to more and more people started a programme of special registration of employers and employees from December, 2016 to June, 2017 and also decided to extend the coverage of the scheme to all the districts in the country in a phased manner. The wage ceiling of coverage was also enhanced from Rs. 15,000/- per month to Rs. 21,000/- from 01.01.2017.

These efforts resulted insubstantial increase in the number of registered employees i.e. Insured Persons and employers and also a quantum jump in the revenue income of the ESIC.

The Government of India is committed to the cause of welfare of employees as well as employers. It is also committed to improve the quality of medical services & other benefits being provided under the ESI scheme.

Download Circular

Apr 012019
 

Employees’ State Insurance (Central) (Amendment) Rules, 2019

G.S.R. 121(E).—The following draft of certain rules further to amend the Employees’ State Insurance (Central) Rules, 1950 which the Central Government, after consultation with the Employees’ State Insurance Corporation, proposes to make in exercise of the powers conferred by Section 95 of the Employees’ State Insurance Act, 1948 (34 of 1948), is hereby published as required by sub-section (1) of the said Section, for information of all persons likely to be affected thereby and notice is hereby given that the said draft rules will be taken into consideration after thirty days from the date of publication in the Official Gazette.( Reducing the Percentage of Contribution)

Any objection or suggestion, which may be received from any person in respect of the said draft rules within the period specified above, will be considered by the Central Government.

Existing Percentage Proposed Percentage
Gross Wages  Rs 21000 Gross Wages  Rs 21000
Employee Employer Total Employee Employer Total
1.75% 4.75% 6.50% 1% 4% 5%

Draft Notification :- ESI contribution rates lowering

Courtesy: Prakash Consultancy Services

Jan 302017
 

ESIC Limit increase from Rs 15000 to Rs 21000 w.e.f from 1st Jan 2017

ESIC limit has been increased from 1st Jan 2017 from Rs 15000 to Rs 21000Draft rules were published on 6th October 2016 and whereas, objections and suggestions received from persons likely to be affected thereby have been considered by the Central Government

Now, therefore, in exercise of the powers conferred by section 95 of the said Act, the Central Government, after consultation with the Employees’ State Insurance Corporation, hereby makes the following rules further to amend the Employees’ State Insurance (Central) Rules, 1950, namely:-1.(1) These rules may be called the Employees’ State Insurance (Central) Third Amendment Rules, 2016.

(2) They shall come into force from 1st day of January, 2017.

2. In the Employees’ State Insurance (Central) Rules, 1950, in rule 50, for the words “fifteen thousand rupees” occurring at both the places, the words ‘twenty one thousand rupees” shall be substituted.

Download Circular

Courtesy: Prakash Consultancy Services

May 052015
 

All ESIC Payment is to be made online from 1st May 2015, Please find the details process of the same & list of 58 Banks from where ESIC Payments can be made Online.

Detail Process of E- Payment

Online ESIC Payment Process

List of bank for Online ESIC Payment

courtesy: [Prakash Consultancy Services ]

Jan 152013
 

ESIC New Inspection Policy

ESIC issued new guidelines for Inspection, to their offices.

Salient features are as under :

a) Effective date is 1st April 2012.
b) Less than 250 coverage, inspection will be once in 3 years.
c) 250 or more coverage, inspection will be once in 2 years.
d) Contractor’s Inspection will be annually.
e) Apart from Inspection, Inspector will talk to Insured persons (Satisfaction Survey).
f) Checking of  “Pahachan Card”.
g) Issues from employees.
h) Issues of Employers.

Download Circular

“Courtesy: http://blog.pcsmgmt.com”