What are ESIC Return and other Annual Compliances? ESIC Return Employee State Insurance (ESI) i...
A Draft containing certain rules was published in official gazette regarding the amendment in Employees’ State Insurance Rules, 1950. Under which government has reduced the ESI contribution which will take effect from 1st July 2019 from 6.5% to 4% with the motive to provide a substantial relief to workers and that will result in more workforce into the formal sector.
Employees’ State Insurance is self-financing security benefits for employees by providing medical, sickness, dependent, maternity, employment injury and Funeral benefit start with their 1st day of on the job.
Additional benefits are also provided by the condition to complete their job for a certain time period.
ESI Scheme is applicable in all factories. It can also apply to other sectors such as Industrial, Commercial and agricultural sector as per the order of Appropriate Government.
ESI is providing various benefits to the employees by providing Six Social Benefits-
The government has taken such steps of reducing the employee contribution for the following reasons –
The reduction of 2.5% includes a reduction of –
|ESIC CONTRIBUTION||REVISED RATE||EXISTING RATE|
Now the Total ESI contribution is 4%
The administration of ESI Act is administered by (ESIC) Employee State Insurance Corporation. It provides the benefit of-
These Benefits are provided under ESI are funded by the contribution made by both the Employer and Employee.
Notification Dated 13th June 2019, Revised ESI Contribution rates are (Employer 3.25%, Employee 0.75%)
G.S.R. 423 (E)-Whereas a draft containing certain rules further to amend the Employees’ State Insurance (Central) Rules, 1950 were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (i) vide number G.S.R. 121(E), dated the 15th February, 2019, as required by sub-section (1) of the section 95 of the Employees’ State Insurance Act, 1948 (34 of 1948), inviting objections or suggestions from all persons likely to be affected thereby before the expiry of a period of thirty days from the date on which the copies of the Official Gazette containing the said notification was published were made available to the public;
In the Draft Rules following amendments shall be made –
GOI (Government of India) through the Ministry of Labour and Employment decides the rate of contribution of Employers and employees.
With the view to increase the in-hand salary of the employees and to reduce the financial burden of the employer the government has reduced the rate of ESI contribution of Employer and employees under ESI Act which as a result also reduces the financial liability and to improve the working condition of the organization.The revision of rates is finalized by the government after taking into consideration the suggestions of the stakeholder.
Also Read: Why ESI Registration is Mandatory?