Question

Tell me the contribution of employee and employers under_Employee's State Insurance Act -1948.

Answer 1

The ESI Scheme runs like the most of the social security schemes. It is a self-financing health insurance scheme and the contributions are raised from covered employees and their employers as a fixed percentage of wages. The payments are to be made on a monthly basis. An employee covered under the scheme has to contribute 1.75% of the wages whereas; an employer contributes 4.75% of the wages payable to an employee. The total contribution in respect of an employee thus works out to 6.5% of the wages payable. However, employees earning less than Rs 50/- a day are exempted from payment of contribution.