ESIC Reduced Both Employee And Employer Contribution from 1, July 2019.

In a historic decision, the Union government has cut the contributions made by employers and employees toward the health insurance scheme of Employees’ State Insurance Corporation (ESIC). The total contribution has been cut to 4 per cent from the current 6.5 per cent.

Here is the good news. After 4 months of issuance of draft rules for reduction in ESIC contribution rates have been reduced and notified. Rates notified are much better than the rates as was notified in draft rules.

Ministry of Labour & Employment has issued a Gazette Notification  No G.S.R 423(E)) dated 13th June 2019 reducing the Employer contribution to ESIC to .75% from 1.75% and Employer contribution to 3.25% from 4.75% effective 1st July 2019.

Seems to have a gift both for employers as well as employees. In draft rules vide Gazette Notification G.S.R 121 (E) dated 15/02/2019 it was proposed to reduce Employee Contribution for ESIC to 1% from 1.75% and Employer Contribution to 4% from 4.75 %.