NISHITH.TV
  • Mumbai
  • Silicon Valley
  • Bengaluru
  • Singapore
  • Mumbai BKC
  • New Delhi
  • Munich
  • New York

Locations

  • Mumbai
  • Silicon Valley
  • Bengaluru
  • Singapore
  • Mumbai BKC
  • New Delhi
  • Munich
  • New York
  • Content
  • Home
  • ABOUT US
  • NDA in the Media
  • Areas of Service
  • Research and Articles
  • Opportunities
  • Contact
  • NDACloud
  • Client Access
  • Member Access
  • Events and Calendar
  • How we perform
  • Knowledge anywhere, anytime
  • See our recent deals
  • Up to date legal developments
  • Case studies in M&A

Research and Articles

HTMLPDF

  • Think Tanks
  • Research at NDA
  • Research Papers
  • Research Articles
  • Policy Papers
  • Hotline
  • Imaginarium Ali Gunjan (Global Research Campus)
  • Japan Desk ジャパンデスク

Hotline


  • Capital Markets Hotline
  • Companies Act Series
  • Climate Change Related Legal Issues
  • Competition Law Hotline
  • Corpsec Hotline
  • Court Corner
  • Cross Examination
  • Deal Destination
  • Debt Funding in India Series
  • Dispute Resolution Hotline
  • Education Sector Hotline
  • FEMA Hotline
  • Financial Service Update
  • Food & Beverages Hotline
  • Funds Hotline
  • Gaming Law Wrap
  • GIFT City Express
  • Green Hotline
  • HR Law Hotline
  • iCe Hotline
  • Insolvency and Bankruptcy Hotline
  • International Trade Hotlines
  • Investment Funds: Monthly Digest
  • IP Hotline
  • IP Lab
  • Legal Update
  • Lit Corner
  • M&A Disputes Series
  • M&A Hotline
  • M&A Interactive
  • Media Hotline
  • New Publication
  • Other Hotline
  • Pharma & Healthcare Update
  • Private Client Wrap
  • Private Debt Hotline
  • Private Equity Corner
  • Real Estate Update
  • Realty Check
  • Regulatory Digest
  • Regulatory Hotline
  • Renewable Corner
  • SEZ Hotline
  • Social Sector Hotline
  • Tax Hotline
  • Technology & Tax Series
  • Technology Law Analysis
  • Telecom Hotline
  • The Startups Series
  • White Collar and Investigations Practice
  • Yes, Governance Matters.
  • Japan Desk ジャパンデスク

HR Law Hotline

November 21, 2006

The Reach Of Employee State Insurance Benefit Expanded

In the exercise of its powers under the Employee State Insurance Act, 1948 (“Act”), the Ministry of Labour and Employment has increased the wage limit for coverage of employees from INR 7,500 per month to INR 10,000 per month. This change came into force from October 1, 2006. The daily rates of benefit, which are used for the computation of the social security benefits available to the employees under the Act, have also been amended.

Under the Act, the Employees State Insurance Scheme of India (“ESI Scheme”) provides protection and benefits to employees and their dependents in contingencies such as sickness, maternity, death and disablement due to an injury during performance of employment or occupational disease. This Act thus requires employers to contribute towards one of the few statutory social security benefits to employees.

In the first instance, the Act is applicable to all factories. However the Act empowers the State Governments to extend the provisions of the Act to any other establishments or class of establishments, industrial, commercial, agricultural or otherwise. Previously, the State Governments had, by notification, extended the provisions of the Act to certain establishments which employ 20 or more employees, each of whom drew wages of less than INR 7,500.

Under the Act, the employer and the employee are required to make the respective contributions only in respect of the employees eligible for such insurance cover, i.e., employees whose wages are within the threshold limit which is now increased to INR 10,000. The employer is required to contribute 4.75% of the wages of the employee towards the ESI Scheme, while the employee’s contribution is 1.75% of wages. Insured employees earning upto INR 50 per day are exempted from making the contribution, however, the employer’s share of contribution is payable.

While the amendment has been effected to keep up with the wage increases in most sectors of the Indian economy, employees in several sectors, especially the IT sector where the wage levels are higher, will continue to be excluded from the applicability of the Act. In such cases, the employers may continue to provide non-statutory private medical insurance benefits as a good human resources measure.

 

- Sangeeta Rana & Rina Kamath

 
 

Source: Ministry of Labour and Employment(E) dated September 22, 2006

Mission and Vision


Distinctly Different

What's New


Law and Practice - India
Research Papers: December 07,2023
The Indian Defence Industry
Research Papers : December 05,2023

Events


Webinars

UAE's eCourts Initiative: Exploring the Abu Dhabi Global Market
October 19,2023 - October 19,2023

This event is over. For event material please click here


Seminar

[Luncheon Seminar] The Dawn of India’s New Data Law 2023: Compliance, Governance, and Leadership
October 13,2023 - October 13,2023

This event is over. For event material please click here


Round Table

Investing In Net Zero
July 22,2022 - July 22,2022

This event is over. For event material please click here

News Roundup


News Articles

Emerging Legal Issues with use of Generative AI
October 27,2023

Quotes

Sandiip Bhammer of Green Frontier Capital in Entrepreneur’s Startups
December 04,2023

Newsletters


Regulatory Hotline

Navigating the Regulatory Landscape: Reconciling FCRA and FEMA
December 05,2023

New Publication

The Indian Defence Industry
December 05,2023

Investment Funds: Monthly Digest

How Do Significant Beneficial Ownership Disclosures Impact AIFs?
December 01,2023

  • Disclaimer
  • Content
  • Feedback
  • Walkthrough
  • Subscribe
Nishith Desai Associates@2016 All rights reserved.