Employees earning upto Rs. 176/- as their average daily wage will soon be exempted from paying employee’s contribution; amendments likely to the ESI (Central) Rules, 1950

Employees earning upto Rs. 176/- as their average daily wage will soon be exempted from paying employee’s contribution; amendments likely to the ESI (Central) Rules, 1950

July 9, 2019 Industries, LAB, states 0

In a draft notification dated 3rd July, 2019, the Ministry of Labour and Employment (“Ministry”) has issued the Employees’ State Insurance (Central) Amendment Rules, 2019 (“Draft Amendment”) to amend the Employees’ State Insurance (Central) Rules, 1950 (“Principal Rules”).

The Draft Amendment proposes to increase the wage threshold for exemption for payment of employee’s contribution under Rule 52. As per the Principal Rule the average daily wage threshold is ₹137/-. The Draft Amendment proposes to the increase the same to ₹176/-.

The Ministry has invited objections and suggestions, on the Draft Amendment and the same may be addressed to the Shri S. K. Singh, Under Secretary (Social Security-I), Ministry of Labour and Employment, Shram Shakti Bhawan, Rafi Marg, New Delhi-110001. (Mail ID – sk.singh1971@nic.in) by 4th August, 2019.

Please see below a tabular depiction of the comparison of the Principal Rules and the Draft Amendment:

Principal Rule Draft Amendment
Rule 52 – Exemption for payment of employees’ contribution

 

The average daily wages during a wage period for exemption for payment of employees’ contribution under Sec. 42* shall be upto and inclusive of rupees one hundred thirty seven.

Rule 52 – Exemption for payment of employees’ contribution

 

The average daily wages during a wage period for exemption for payment of employees’ contribution under Sec. 42* shall be upto and inclusive ofrupees one hundred seventy six.

   


Section 42 – General provisions as to payment of contributions

(1) No employee’s contribution shall be payable by or on behalf of an employee whose average daily wages are below during a wage period are below such wages as may be prescribed by the Central Government.

Explanation. — The average daily wages of an employee shall be calculated in such manner as may be prescribed by the Central Government.

(2) Contribution (both the employer’s contribution and the employee’s contribution) shall be payable by the principal employer for each wage period, in respect of the whole or part of which wages are payable to the employee and not otherwise.

SourceMinistry of Labour and Employment

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