Understanding the 2016 ESI Amendment: How New Areas in Maharashtra, Rajasthan, and Bihar Are Affected

Notification on Employees' State Insurance (Central) Amendment Rule, 2016

Please find attached a new notification from ESI dated 25th July 2016 regarding the Employees' State Insurance (Central) Amendment Rule, 2016 and a list of new areas included in Maharashtra, Rajasthan, and Bihar.

The Employees' State Insurance (Central) Amendment Rule, 2016 explains the draft rules for revised ESI rates in newly included ESI implementing areas for the first time under the purview of the ESI Act.

Amendments

- Rule 51-(A) shall be renumbered as rule "51A". It states: In areas where the Act is implemented for the first time, the rates of employers' and employees' contributions for the initial twenty-four months shall be as follows:
a) Employer Contribution: 3% of ESIC Wage
b) Employee Contribution: 1% of ESIC Wage

Please find the link below: http://streethr.blogspot.in/2016/08/...tribution.html

Thank you.

Dear Rahul Kumar,

From which date is this amendment in force for all, and what is the decreased rate of contribution from 6.5 to 4?

Thank you.

ESI Contribution Rates for Newly Notified Areas

There is no reduction in the rates of contribution for existing establishments. The rule applies to establishments in an area newly brought under ESI by notification. As you know, ESI is not applicable to the entire India, but there are areas where the scheme is not implemented. ESIC can notify such areas as ESI notified areas, and accordingly, many areas are being notified as ESI covered areas. When a place is notified as an ESI covered area, the establishments in such areas will come under the coverage of the ESI Act, and they would be bound to pay the contribution at 4.75% + 1.75% of wages with effect from the date of notification.

The present amendment states that whenever a new area is brought under the ESI scheme, the establishments in that area will have a concessional rate of contribution for 2 years.

Regards, Madhu.T.K

Hi,

Please refer to this attachment and suggest. I reckon this is applicable only for new coverage areas.

With Regards,

Sathya Narayana Y S

The notification only states that in respect of an establishment in an area newly notified as an ESI-covered area, the rates will be 3% and 1% for two years (twenty-four months). That means this is applicable to newly covered establishments in the newly notified areas and not to all establishments.

Madhu.T.K

In addition to the views of Sh. Madhu T.K. ji, as mentioned above, I would like to submit that the said notification is only an intention notification, indicating draft rules. These are not final, and the exact date of implementation or enforcement of the amendment, if finalized by the appropriate government, will be indicated in the final notification. Therefore, until the draft rules are finalized and published in the Gazette of India, and the effective date of said rules is indicated, it remains only a proposal or an idea.

Regards,
[Username]

As the senior members, Shri Madhu T.K and Mr. Mehta, have rightly mentioned, first, it is a draft rule proposed which has not been passed yet. Secondly, the rate is applicable for all the new areas where ESI is implemented for the first time, and the rate is valid for the first 24 months of subscription from the date of such implementation. From the 25th month, the regular rate will be applicable.

Can anyone provide which areas are covered in Maharashtra, Rajasthan, and Bihar? If possible, please provide notification in respect of the same.

Subject: Notification Enclosed for Your Reference

Dear [Recipient's Name],

I am writing to inform you that the notification has been enclosed for your kind reference. Additionally, you can also access the same information on the ESIC official website.

Thank you for your attention to this matter.

Regards,
Sathya Narayana Y S

Dear Members,

We have a manpower contract in the newly ESI notified area in Maharashtra. We obtained a subcode for this but are unable to make contributions at 4%. The contributions are being paid online, and the software automatically calculates them at 6.5%.

Please help me understand how to make contributions at 4%, or if it is not applicable for the subcode unit.

Regards,
Upendra