{"id":215716,"date":"2019-06-14T12:59:44","date_gmt":"2019-06-14T07:29:44","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=215716"},"modified":"2019-06-15T12:29:00","modified_gmt":"2019-06-15T06:59:00","slug":"historic-decision-by-government-of-india-esi-contribution-rates-reduced-from-6-5-to-4","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2019\/06\/14\/historic-decision-by-government-of-india-esi-contribution-rates-reduced-from-6-5-to-4\/","title":{"rendered":"[Breaking] Historic Decision | ESI Contribution rates reduced from 6.5% to 4%"},"content":{"rendered":"

The Government of India has taken a historic decision<\/strong> to reduce the rate of contribution under the ESI Act from 6.5% to 4%(employers\u2019 contribution being reduced from 4.75% to 3.25% and employees\u2019 contribution being reduced from 1.75% to 0.75%. Reduced rates will be effective from 01-07-2019 \u00a0This would benefit 3.6 crore employees and 12.85 lakh, employees.<\/p>\n

The reduced rate of contribution will bring about a substantial\u00a0relief to workers and it will facilitate further enrollment of workers\u00a0<\/strong>under the ESI scheme and\u00a0bring more and more workforce into the formal sector<\/strong>. Similarly, reduction in the share of contribution of employers will\u00a0reduce the financial liability of the establishments leading to improved viability\u00a0<\/strong>of these establishments. This shall also lead to\u00a0enhanced Ease of Doing Business<\/strong>. It is also expected that the reduction in the rate of ESI contribution shall lead to improved compliance of law.<\/strong><\/p>\n

About the Employees\u2019 State Insurance Act,1948 :<\/p>\n

The Employees\u2019 State Insurance Act, 1948 (the ESI Act) provides for medical, cash, maternity, disability and dependent benefits\u00a0<\/strong>to the Insured Persons under the Act. The ESI Act is administered by Employees\u2019 State Insurance Corporation (ESIC). Benefits provided under the ESI Act are funded by the contributions made by the employers and the employees.<\/p>\n

Under the ESI Act,\u00a0employers and employees both contribute\u00a0<\/strong>their shares respectively. The Government of India through the 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\u2019 share being 4.75% and employees\u2019 share being 1.75%<\/strong>. This rate is in vogue\u00a0since 01-01-1997<\/strong>.<\/p>\n

In exercise of the powers conferred by Section 95 of the said Employees\u2019 State Insurance Act, 1948, the Central Government, after consultation with the Employees\u2019 State Insurance Corporation, hereby makes the following rules further to amend the Employees\u2019 State Insurance (Central) Rules, 1950, namely:-<\/p>\n

1. (1) These rules may be called the Employee\u2019s State Insurance (Central) Amendment Rules, 2019<\/strong>;<\/p>\n

(2) They shall come into force on the 1st day of July, 2019.<\/p>\n

2. In the Employees\u2019 State Insurance (Central) Rules, 1950, in Rule 51, \u2013<\/p>\n

(a) in clause (a), for the words \u201cequal to four and three-fourth per cent of the wages\u201d, the words \u201cequal to three and one-fourth per cent. of the wages\u201d shall be substituted;<\/p>\n

(b) in clause (b), for the words \u201cequal to one and three-fourth per cent of the wages\u201d, the words \u201cequal to three-fourth per cent. of the wages\u201d shall be substituted.<\/p>\n

\n

[Press Release dt. 13-06-2019<\/a>]<\/strong><\/p>\n

[Source: PIB]<\/strong><\/p>\n

Ministry of Labour & Employment<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The Government of India has taken a historic decision to reduce the rate of contribution under the ESI Act from 6.5% to <\/p>\n","protected":false},"author":8808,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1188,2],"tags":[36040,36041,36039],"class_list":["post-215716","post","type-post","status-publish","format-standard","hentry","category-hot_off_the_press","category-news","tag-employees-contribution","tag-employees-state-insurance-act-1948","tag-esi-contribution"],"yoast_head":"\n[Breaking] Historic Decision | ESI Contribution rates reduced from 6.5% to 4% | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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days. \u00a0 Key points: Employers can deposit the contribution for March 2022 till April 30, 2022 instead of April 15, 2022. Employers can file\u2026","rel":"","context":"In "Legislation Updates"","block_context":{"text":"Legislation Updates","link":"https:\/\/www.scconline.com\/blog\/post\/category\/legislationupdates\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/04\/MicrosoftTeams-image-181.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/04\/MicrosoftTeams-image-181.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/04\/MicrosoftTeams-image-181.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/04\/MicrosoftTeams-image-181.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/04\/MicrosoftTeams-image-181.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":228381,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/04\/17\/lockdown-period-for-filing-esi-contribution-for-the-month-of-february-extended-to-15th-may-2020\/","url_meta":{"origin":215716,"position":1},"title":"Lockdown | Period for filing ESI contribution for the month of February — extended to 15th May, 2020","author":"Bhumika Indulia","date":"April 17, 2020","format":false,"excerpt":"Extension of time in filing ESI contribution As a relief measure, the period for filing ESI contribution for the month of February and March was earlier extended to 15th April and 15th May, respectively. Now, considering the hardship being faced by employers, the period for filing ESI contribution for the\u2026","rel":"","context":"In "Legislation Updates"","block_context":{"text":"Legislation Updates","link":"https:\/\/www.scconline.com\/blog\/post\/category\/legislationupdates\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/01\/ESIC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/01\/ESIC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/01\/ESIC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/01\/ESIC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/01\/ESIC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":269454,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/07\/02\/bombay-high-court-nature-of-activities-conducted-by-bcci-are-commercial-in-nature-liable-to-pay-employees-contribution-under-esi-act-1948\/","url_meta":{"origin":215716,"position":2},"title":"Bombay High Court| Nature of activities conducted by BCCI are commercial in nature, liable to pay employees contribution under ESI Act, 1948","author":"Editor","date":"July 2, 2022","format":false,"excerpt":"Bombay High Court: Bharati Dangre, J. dismissed an appeal which was filed by Board of Control for Cricket of India (\u2018BCCI'), being aggrieved by the impugned judgment and order passed by the Employees Insurance Court at Bombay (ESI Court) dated 09-09-2021 where BCCI was held to be under the ambit\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Bombay High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":227224,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/03\/18\/esi-contribution-for-february-and-march-can-be-paid-up-to-15th-april-2020-relaxation-due-to-covid-19\/","url_meta":{"origin":215716,"position":3},"title":"ESI Contribution for February and March can be paid up to 15th April, 2020 — Relaxation due to COVID-19","author":"Bhumika Indulia","date":"March 18, 2020","format":false,"excerpt":"Keeping in view the pandemic in the form of \"Corona Virus\"\u00a0 (COVID-19) in the country, the Director General has relaxed the provision as entered in regulations 26 & 31 of 'The Employees' State Insurance (General) Regulations , 1950'. 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All HC answers","author":"Bhumika Indulia","date":"May 2, 2022","format":false,"excerpt":"Allahabad High Court: \u00a0Stating that the word \u2018manufacturing process\u2019 has been expansively defined under the Factories Act even to include Printing Press activity as a manufacturing process whereas in common parlance Printing Press cannot be termed as a \u2018manufacturing process\u2019, Pankaj Bhatia, J., held that, the term \u2018manufacturing process\u2019 was\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/215716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/8808"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=215716"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/215716\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=215716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=215716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=215716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}