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)
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