Currently Employees earning gross salary upto Rs.21,000 per month are required to contribute 1.75% of the wages earned towards contribution to Employee State Insurance Corporation (ESIC) and Company (employer) needs to contribute 4.75% of the wages paid/payable. The Government is considering to lower the Employee’s Contribution Rate to 1% and that of Company’s to 4% (i.e. reduction of 0.75% each). Draft  State Insurance (Central) (Amendment) Rules, 2019  published on 15/02/2019 for information of all stakeholders likely to be affected. Any objection or suggestion, which may be received from any person in respect of the said draft rules within thirty days, will be considered by the Central Government. The objections and suggestions may be addressed to Shri S. K Singh, Under Secretary, Ministry of Labour and Employment, Shram Shakti Bhawan, Rafi Marg, New Delhi-110001.

Notification G.S.R. 121 (E) issued by Ministry of Labour & Employment dated 15th Feb., 2019

Reduction in ESIC contribution rates will be effective only once published in Official Gazette. The proposed amendment in ESIC Act shall benefit the employees in terms of increase in take-home salary and will benefit companies in terms of reduction in employment cost.


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