ARTICLE · 11 JANUARY 2017

More Workers Get Covered Under India's Mandatory Employee Insurance

Nishith Desai Associates

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The wage ceiling for employee coverage under the Employees' State Insurance Act, 1948 ("ESI Act") has been increased by the Indian government, thereby including a larger workforce...

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Wage ceiling for mandatory subscription and contribution for employees' insurance scheme increased to INR 21,000 per month.
Members already enrolled under the ESIC Scheme will continue to be members irrespective of their monthly wages.
The amendments have taken effect from January 1, 2017.

The wage ceiling for employee coverage under the Employees' State Insurance Act, 1948 ("ESI Act") has been increased by the Indian government, thereby including a larger workforce for mandatory insurance coverage.

The Ministry of Labour and Employment has through notification dated December 22, 2016¹ ("ESI 2017 Amendment") amended the Employees' State Insurance (Central) Rules, 1950 ("the ESI Rules") under the ESI Act, to increase the wage ceiling for determining employee eligibility² under the statute. The ESI 2017 Amendment has increased the wage ceiling from INR 15,000 (approx. US$ 220) per month to INR 21,000 (approx. US$ 310) per month.³

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