Government reduces ESI contribution rate to 4 per cent

  • On 13th June, 2019, government 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%.
  • The move, aimed at formalising India’s informal workforce and expanding social security coverage, will be effective from July 1, 2019.

Changes

  • Employer’s contribution has been reduced from 4.75 per cent to 3.25 percent.
  • Employee’s contribution has been reduced from 1.75 per cent to 0.75percent.

Employees’ State Insurance

Act 1948 (ESI Act)

  • Provides for medical, cash, maternity, disability and dependent benefits to the Insured Persons under the Act.
  • Administered by the ....


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