2.50% DECREASE IN ESI RATES FROM 1ST JULY 2019

Описание: Reduced the salary contribution of industrial workers who are eligible for healthcare benefits under the Employees’ State Insurance Act (ESI) Act from 6.5% to 4%.

Employees’ contribution slashed from 1.75% to 0.75% of their Salary

Employers’ contribution will come down from 4.75% to 3.25%

The move is aimed at formalising India’s informal workforce and expanding social security coverage.

The ESI applies to organisations with 10 or more employees, drawing a salary of up to ₹21,000.

The healthcare benefits under the ESI scheme will remain the same, but employees would now have to contribute just 0.75% of their salary (basic plus allowances), instead of the existing 1.75%, while the employers’ contribution will come down from 4.75% to 3.25%, according to the ministry of labour and employment.

The reduced rates will be effective from 1 July. “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 members of the workforce into the formal sector,”.

Reduction in the share of contribution of employers will reduce the financial liability of the establishments, leading to improved viability of these establishments. The reduced rate of contribution means lower cost for both the employees and the employers. The employee gets a higher take home salary. A lower rate of contribution does not affect the benefits defined in the scheme.

It would benefit 36 million insured persons and 1.3 million organizations...