Amendment To The Employee's State Insurance (Central) Rules, 1950

The Employee's State Insurance (Central) Third Amendment Rules, 2016 ("ESI Rules") were notified by the Ministry of Labour and Employment, Government of India on December 22, 2016, thereby amending the salary or wages threshold for coverage of an employee under the Employee's State Insurance Act, 1948 ("ESI Act") with effect from January 1, 2017. The ESI Act inter alia applies to factories and commercial establishments and provides for social security insurance for employees in case of sickness, maternity and employment injury. In Karnataka, the ESI Act applies to establishments with 10 or more employees.

The eligibility limit of an "employee" has been amended under the ESI Rules, whereby an employee who now earns wages of Rs. 21,000/- (approx. US$ 309) or under per month should be mandatorily enrolled under employee insurance under the ESI Act. This is an increase from the earlier wage cap of Rs. 15,000/- (approx. US$ 221) per month, thereby extending the coverage