Reduction in Rate of Employee State Insurance Corporation (ESIC) Contribution

Government has approved and released notifications reducing the rates of Employee State Insurance Contribution rates. Employer contribution is reduced to 3.25% from 4.75% and the employee contribution is reduced to 0.75% from 1.75%. The revised rates of ESI contributions shall be effective from July 01, 2019.

Government Gazette Notification - Reduction in ESIC Contribution Rates

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;

And whereas, the copies of the said Official Gazette were made available to the public on the 15th February, 2019;

And whereas, objections or suggestions received from the public in respect of the said draft rules within the period specified above 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 Employee’s State Insurance (Central) Amendment Rules, 2019; (2) They shall come into force on the 1st day of July, 2019.

2. In the Employees’ State Insurance (Central) Rules, 1950, in rule 51, –

(a) in clause (a), for the words “equal to four and three-fourth per cent of the wages”, the words “equal to three and one-fourth per cent. of the wages” shall be substituted;

(b) in clause (b), for the words “equal to one and three-fourth per cent of the wages”, the words “equal to three-fourth per cent. of the wages” shall be substituted.
Note: The principal rules were published in the Gazette of India, Part-II, Section 3, Subsection (i), vide number S.R.O. 212, dated the 22nd June, 1950, and last amended by notification number G.S.R. 605 (E), dated 3rd July, 2018.