Current ESIC Law in India
Employees' State Insurance provides medical care and cash benefits for contingencies such as sickness, maternity, employment injury, disablement and death due to employment injury. From 21 November 2025, the Code on Social Security, 2020 is the principal statutory framework governing social security, including Employees' State Insurance.
Code on Social Security, 2020 - Ministry of Labour & Employment Employees' State Insurance Corporation
Who Must Register with ESIC?
Under the current social-security framework, ESIC coverage is mandatory for establishments crossing the statutory employment threshold and may also extend to smaller or hazardous establishments as provided by law and notification.
- Mandatory coverage: establishments having more than 10 employees, subject to the notified applicability of the ESI scheme.
- Voluntary coverage: establishments with fewer than 10 employees may opt for ESI coverage in accordance with the Code and applicable procedure.
- Hazardous or life-threatening occupation: coverage may apply even where only one employee is employed, when the occupation/process is notified by the Central Government.
- The current framework has expanded coverage beyond the older sector-specific approach and includes establishments such as medical and educational institutions, mines, ports, plantations and other establishments falling within the statutory definition, subject to applicable notifications and operational coverage.
Employers should verify current territorial/establishment coverage and notifications before deciding that ESI is inapplicable.
Current ESIC Salary / Wage Limit
The Ministry of Labour & Employment has clarified that the ₹21,000 monthly wage ceiling continues to apply at present. From 21 November 2025, however, wages must be determined using the definition in the Code on Social Security, 2020.
For coverage and contribution purposes, the Code's wage definition generally includes basic pay, dearness allowance and retaining allowance. If excluded components exceed 50% of total remuneration (or such other percentage as may be notified), the excess is added back for statutory wage computation. Employers should therefore review salary structures rather than relying only on the basic-pay figure.
ESI Contribution Rates
| Contributor | Current rate | Basis |
|---|---|---|
| Employer | 3.25% | Wages payable to the covered employee |
| Employee | 0.75% | Wages payable to the covered employee |
| Total | 4.00% | Employer + employee share |
Employees whose average daily wage falls within the notified exemption limit are not required to pay the employee share; the employer's share remains payable. The principal employer is responsible for depositing the statutory contributions, including in relation to covered employees engaged through an immediate employer/contractor where the law so requires.
ESIC Registration Process for Employers
- Determine whether the establishment is mandatorily coverable, voluntarily opting in, or covered because of a notified hazardous or life-threatening activity.
- Keep establishment identity, PAN, address, bank, employer/contact and employee details ready.
- Apply online through the Government registration system. ESIC registration is available through the Unified Shram Suvidha Portal and ESIC's employer registration facility.
- Complete the establishment and eligible-employee particulars and submit the online registration.
- On successful registration, preserve the ESIC identification/code and Labour Identification Number (LIN), wherever allotted.
- Register eligible employees promptly and maintain accurate wage, attendance, contribution and employment records.
Documents and Information Usually Required
The portal may request information according to the type of establishment. Employers should generally keep the following available:
- PAN and legal name of the establishment/entity;
- registered and business address details;
- certificate of incorporation/registration, partnership deed or other constitution document, as applicable;
- Memorandum and Articles of Association for companies, where applicable;
- GST registration and Shops & Establishments/factory or other licence details, where applicable;
- bank account details and supporting proof;
- principal employer/authorised person details, mobile number and email address;
- employee identity, date of joining, wage and family/nominee particulars required for ESI enrolment;
- details of contractors/immediate employers and their covered employees, where applicable.
The exact online fields and documentary requirements may vary. Employers should follow the current portal requirements rather than relying on obsolete paper Form 01 procedures.
Major Benefits Available Under ESI
Subject to contribution and eligibility conditions, insured persons and their eligible family members/dependants may receive the following statutory benefits:
- Medical benefit: medical care for insured persons and eligible family members through the ESI medical system.
- Sickness benefit: periodical cash benefit during certified sickness, subject to qualifying contribution conditions.
- Extended sickness benefit: enhanced/extended support for specified long-term diseases subject to prescribed conditions.
- Maternity benefit: cash benefit for eligible insured women for confinement, miscarriage and specified related circumstances, subject to statutory conditions.
- Temporary disablement benefit: periodical payment for employment injury resulting in temporary disablement.
- Permanent disablement benefit: periodical payment based on loss of earning capacity caused by employment injury.
- Dependants' benefit: periodical payments to eligible dependants where an insured person's death results from employment injury.
- Funeral expenses and other benefits: available subject to the scheme and prescribed eligibility.
Medical benefit can begin from entry into insurable employment, subject to registration and scheme rules. Cash benefits generally depend on the relevant contribution and benefit periods and the specific qualifying conditions for each benefit.
Dependants' Benefit
Where an insured person dies as a result of an employment injury, eligible dependants may receive periodical dependants' benefit according to the statutory distribution rules. The benefit is administered and paid by ESIC; it is not a separate 90% wage payment made directly by the employer.
Monthly ESIC Compliance and Due Date
Employers must maintain correct employee and wage records, file employee-wise contribution details through the portal and deposit the contributions due.
The older statement that ESI contribution is due by the 21st of the following month is outdated. Delayed payment can attract statutory interest and damages/penal consequences under the applicable framework.
Records employers should maintain
- employee and attendance records;
- wage/payroll records and salary structure;
- ESI registration and insured-person details;
- monthly contribution/challan records;
- contractor/immediate-employer records where applicable;
- accident and employment-injury records;
- supporting statutory registrations and employment records.
Late Payment: Interest and Damages
Delayed ESI contributions may attract simple interest under the applicable provisions. ESIC may also levy damages for delay subject to the law, regulations, period of default and any applicable relief or waiver provisions. Employers should not treat late payment as a routine extension of the due date.
Important Points for Employers
- Apply the Code on Social Security wage definition from 21 November 2025 when determining ESI wages.
- Do not assume a medical or educational establishment remains outside ESI merely because it was excluded under an older State notification or earlier regime.
- Do not omit eligible contract labour merely because workers are hired through a contractor; principal-employer obligations may apply.
- Register new eligible employees promptly so that medical and cash-benefit rights are not prejudiced.
- Verify changes in notified wage ceilings, hazardous occupations, benefit conditions and portal procedures from official Government sources.
Frequently Asked Questions
What is the current ESIC wage limit?
The current notified wage ceiling is ₹21,000 per month. The Ministry of Labour & Employment has clarified that this ceiling continues at present, while the Code on Social Security wage definition applies from 21 November 2025.
What are the present ESI contribution rates?
The prevailing rates are 3.25% payable by the employer and 0.75% payable by the employee, subject to statutory exemptions.
How many employees are required for ESIC coverage?
Under the current Code framework, establishments with more than 10 employees are mandatorily coverable, establishments below 10 may obtain voluntary coverage, and notified hazardous or life-threatening occupations may be covered even where one employee is employed.
What is the current ESIC contribution due date?
Contribution is payable within 15 days of the last day of the calendar month in which it falls due under the current operational regulation.
Is paper Form 01 still the normal registration method?
No. Employer registration is now handled online through Government portals. Employers should follow the current online workflow and document requirements.
Official ESIC Resources
ESIC Official Website Unified Shram Suvidha Portal Code on Social Security, 2020
Rules, contribution rates, wage ceilings, benefit conditions and portal procedures can change. Verify transaction-specific requirements from the official portal before filing or making payment.