Employees' State Insurance Act of India: Labour Ministry Issues Draft Rules For Enhancement Of Wage Ceiling:
The Ministry of Labour and Employment has recently issued draft rules for the enhancement of the wage ceiling (salary limit) from INR 10,000 (approx. US$ 225) per month to INR 15,000 (approx. US$ 330) per month for coverage under the Employees' State Insurance Act, 1948 ("ESI Act"). Once the draft rules enter into force, a greater section of employees would get covered under the ESI Act, a federal labor law. It is expected that this new wage ceiling will be implemented from April 1, 2010, which is the beginning of the new financial year.
Background
The ESI Act provides insurance coverage to eligible employees in the case of work-related injury, sickness, maternity, disablement, and death. The ESI Act applies to all factories employing at least 10 employees. It has also been extended to shops, hotels, restaurants, cinemas, transport undertakings, etc. The ESI Act requires the employer and the eligible employees to contribute insurance premium to the Employees State Insurance Fund, which is administered by the Employees' State Insurance Corporation ("ESIC"). The contributions are to be made at specified rates which are revised from time to time. With effect from 1997, the rate of the employer's contribution is 4.75% of each eligible employee's wages and that of the employee is 1.75% of the wages. These contributions are to be made during two contribution periods of six months each. In addition to the insurance coverage, to the extent an employee is already covered under the ESI Act, the employer is exempted from its financial liability under the Employee's Compensation Act, 1926, and the Maternity Benefit Act, 1961.
From India, Ahmadabad
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5The Ministry of Labour and Employment has recently issued draft rules for the enhancement of the wage ceiling (salary limit) from INR 10,000 (approx. US$ 225) per month to INR 15,000 (approx. US$ 330) per month for coverage under the Employees' State Insurance Act, 1948 ("ESI Act"). Once the draft rules enter into force, a greater section of employees would get covered under the ESI Act, a federal labor law. It is expected that this new wage ceiling will be implemented from April 1, 2010, which is the beginning of the new financial year.
Background
The ESI Act provides insurance coverage to eligible employees in the case of work-related injury, sickness, maternity, disablement, and death. The ESI Act applies to all factories employing at least 10 employees. It has also been extended to shops, hotels, restaurants, cinemas, transport undertakings, etc. The ESI Act requires the employer and the eligible employees to contribute insurance premium to the Employees State Insurance Fund, which is administered by the Employees' State Insurance Corporation ("ESIC"). The contributions are to be made at specified rates which are revised from time to time. With effect from 1997, the rate of the employer's contribution is 4.75% of each eligible employee's wages and that of the employee is 1.75% of the wages. These contributions are to be made during two contribution periods of six months each. In addition to the insurance coverage, to the extent an employee is already covered under the ESI Act, the employer is exempted from its financial liability under the Employee's Compensation Act, 1926, and the Maternity Benefit Act, 1961.
From India, Ahmadabad
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Notification Regarding enhancement of Wage ceiling for ESI w.e.f. 01st May 2010.pdf