Reduction in ESI Rates

The Ministry of Labour & Employment, Government of India, by a notification dated June 13, 2019, has reduced the rate of contributions payable by employers and employees under the Employees’ State Insurance Act, 1948 (‘ESI Act’) with effect from July 1, 2019, with the objective of promoting ease of doing business and promoting compliance with law. The employers’ contribution has been reduced from the erstwhile rate of 4.75% to 3.25% and the employees’ contribution has been reduced from the erstwhile rate of 1.75% to 0.75%.