First time in 22 years. Another Statutory change. Update your Finsys ERP in the last week of June 2019.
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The government on June 13 cut the rate of contribution under the Employees’ State Insurance Act (ESI Act) to 4 percent from 6.5 percent. The first reduction in 22 years will be effective July 1.
With this reduction, the employers’ contribution to the ESI Act has been reduced to 3.25 percent from 4.75 percent and the employees’ contribution has been reduced to 0.75 percent from 1.75 percent. According to a release, the reduced rates will be effective from July 1.
The move is expected to benefit 3.6 crore employees and 12.85 lakh employers. The reduced rate of contribution is expected to facilitate further enrollment of workers under the ESI scheme and bring more of the workforce into the formal sector.
The note also stated that a reduction in the share of contribution of employers is expected to enhance the ease of doing business and improved compliance of the law.
Good for you, Good for your employee.
Good to control the CTC ( Cost to the company )
Finsys at your service
PPT or Video Manual for this shall be hosted on the site shortly