Employees getting Rs.176 or less as average daily wage are exempted from ESIC Contribution

The Ministry of Labour and Employment vide notification dated 6th September 2019 has amended Rule 52 of Employees’ State Insurance (Central) Rules, 1950. By this notification, the average daily wage limit for exemption from payment of employee’s contribution has been increased to Rs.176 from Rs.137.

The ESI Scheme is financed by contributions from employers and employees a specified rate. The rates are revised from time to time. Currently, the employee’s contribution rate (w.e.f. 01.07.2019) is 0.75% of the wages and that of employer’s is 3.25% of the wages paid in respect of the employees in every wage period. Employees in receipt of a daily average wage up-to Rs.176/- are exempted from payment of contribution. However, the employers will contribute their own share in respect of these employees. Thus, as per new Rule 52, an employee is not liable to pay any contribution towards ESI Scheme if his average daily wages during a wage period is Rs. 176 or less.

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