On 26th February 2010, the Government of India vide notification (See Note-2)  invited suggestions in respect of an amendment proposed to be made regarding increase in the existing wage ceiling for coverage of employees under Employees State Insurance Act, 1948 (‘ESI Act’).

Based on the suggestions received and after consultation with Employees State Insurance Corporation, the Central Government has amended (See Note-2) Employees State Insurance (Central) Rules, 1950 in this regard.

Key features of the amendment

The wage ceiling for coverage of employees has been increased from Rs. 10,000 per month to Rs. 15,000 per month.

The amendment shall come into force with effect from 1st May, 2010.

Our Comments

The ESI Act was enacted to provide for certain benefits to employees (of factories and specified establishments) in case of sickness, maternity, disabilities and employment injury resulting in loss of wages or earning capacity.

Prior to the said amendment, the employees drawing wages up to Rs. 10,000 per month were covered under the ESI Act. This limit needed to be revised in view of the increase in the cost of living.

Note to above:-

  1. 1. Notification No. G.S.R 164 (E)
  2. 2. Employees State Insurance (Central) Amendment Rules, 2010 vide notification F. NO. S-38025/ 04/ 2010-SS-I dated 20th April 2010.

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