ESI contribution: Last date extended by 15 days – Will it impact employees?

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Updated: Mar 17, 2020 4:07 PM

The ESI contribution rate for FY 2019-20 stands at 4 per cent, which includes the employer contribution of 3.25 per cent and the employee’s contribution of 0.75 per cent.

ESI benefit, esi contribution, esi contribution rate fy 2019-20, esi card eligibility, registration, esi contribution employer and employee,ESI Benefits: The ESI benefits include medical, maternity, disability and dependent benefits to the employees insured under the ESI Act.

ESI Latest News: A relaxation in the regulations of the Employees’ State Insurance (ESI) Act 1950 has been brought about. This is keeping in view the pandemic in the form of Coronavirus (Covid 19) in the country. The Director-General of the ESI Corporation (ESIC) has relaxed the filing period of ESI contribution for the employers by 15 days. There will, however, not be any impact on the employees working in establishments and contributing to the ESI. The ESI benefits to the employees will continue to be provided as usual.

The corporation has informed the employers that the contribution for the month of February 2020 and March 2020 can be filed up to 15th April 2020 and 15th May 2020 instead of 15th March and April 15th respectively.

In the case of every employee, the employer is liable to pay his own contribution and also deduct employee’s share from the wages and pay these contributions to the ESI within 15 days of the last day of the calendar month in which the contributions are due.

To bring about this relaxation, the ESIC circular states that “the provision of regulation 31 shall be read as 45 days instead of 15 days for the contribution payable for the month of February and March only.”

The ESI contribution rate for FY 2019-20 stands at 4 per cent, which includes the employer contribution of 3.25 per cent and the employee’s contribution of 0.75 per cent. The ESI contribution rate was revised downwards from July 1, 2019.

The ESI benefits include medical, maternity, disability and dependent benefits to the employees insured under the ESI Act. The scheme provides full medical care to the employee registered under the ESI Act, 1948 during the period of his incapacity, restoration of his health and working capacity. It provides financial assistance to compensate for the loss of wages during the period of his abstention from work due to sickness, maternity and employment injury and during the hospitalization in any ESI hospital.

ESI Act covers those employees whose monthly wages are Rs 21,000 or below. In December 2016, the wage limit for coverage under the Act was revised from Rs 15,000 per month to Rs 21,000 per month.

There are estimated about 3.6 crore employees holding ESI card and 12.85 lakh employers under the purview of ESI. The ESI Act mainly caters to business places where 10 or more persons are employed and, therefore, applies to both organised and unorganised sectors.

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