Room # 03, Falaknuma Building,
Industrial Relations Advisors, 39, Abdullah Haroon Road,
Management & Labour Laws Karachi - 74700
Circular No. C – 179-A Date:- 23 -06-2018
Sindh Employees Social Security
(Amendment) Act, 2018
1- The Sindh Assembly has passed “The Sindh Employees Social Security (Amendment) Act, 2018”assented by the Governor on 12-5-2018 and notified in the Sindh Govt. Gazette dated 17-5-2018. Amendment shall be applicable from 17-5-2018.
2- Beside few major changes, most of the amendments/changes are correcting mistakes, improvement of the Governing Body, benefits etc. The major changes are explained as under:
i. We are starting this circular from section 75 due to its importance and proper understanding. Section 75 has been substituted by a new provision and now Governing Body has nothing to do with the contribution and its rate etc. In this section two types of wage limits are explained as under:-
A) The lower wage limit…… Equivalent to the Minimum Wages under Sindh Minimum Wages Act, 2015 which is now Rs. 15,000 p.m.
B) The upper wage limit …… Rs. 5000 plus the Minimum Wages under the Sindh Minimum Wages Act, 2015 (Rs. 5000 + 15000 = Rs. 20,000).
ii. Section 2(9) (e) (initial coverage wage limit) has been substituted by a new proviso which says that any person employed on wages exceeding the upper wage limit determined u/s. 75 i.e. Rs. 20,000 p.m. and employee shall not cease to be an employee if his wages exceed the upper wage limit determined under section 75 i.e. Rs. 20,000.
iii. Section 2(27) (Self Assessment Scheme) has been substituted by a new definition which is the same as old except 6% contribution is on the lower wage limit determined under section 75 i.e. Rs. 15,000.
iv. Definition of, “Upper Wage Limit” introduced by section 2 (31-A) says that the same shall be determined u/s 75.
v. Proviso for contribution in section 20(1) has been substituted as no contribution shall be payable on wage in excess of the upper wage limit determined u/s 75 i.e. Rs. 20,000.
vi. Section 21 (Self Assessment Scheme) has been slightly modified and now 6% contribution shall be on the lower wage limit per month per secured employee.
vii. Section 57 has been substituted which says that, the wage of a secured person as are in excess of upper limit determined under section 75 shall not be accounted for the purpose of determing the rate of various benefits provided under the Act.
3- In nutshell the major amendments are :-
i) Every employee getting wages up to Rs. 20,000 p.m. is covered.
ii) However those employees whose wages are from Rs. 15.000 to Rs. 20,000, their contribution shall be paid 6% of the prevailing minimum wages.
iii) Once an employee is covered, he remains covered irrespective of his wages exceeding the upper wage limit (i.e. Rs. 20,000) but no contribution shall be payable on so much of an employee’s wages as are in excess of the upper wage limit determined under section 75 (i.e. Rs. 20,000).
iv) Under the Self Assessment Scheme 6% contribution is payable on lower wage limit i.e. Rs. 15,000.
4- The whole exercise is to get the maximum contribution but without increasing any benefits to the employees.
5- You are advised to carefully peruse the provisions of amendments and may consult your Labour Law Consultant on the matter.
For M/s S. M. Yaqoob
Industrial Relations Advisors
& Labour Laws Consultant