The Code on Social Security, 2020 (“CSS 2020”) is one of the most significant components of India’s labour reforms. It consolidates nine central legislations, including the Employees’ State Insurance Act, 1948, into a single framework. The focus is twofold: to streamline compliance and to expand the coverage for a larger segment of the workforce. Within this framework, the Employees’ State Insurance (ESI) Scheme remains a key component of the code.
The importance of ESI Scheme coverage under Social Security Code 2020 lies in the fact that it directly governs the access to statutory medical care and insurance benefits for employees across industries. Unlike the narrower reach of the earlier statute, the Code allows the ESI Scheme to extend into new sectors, including services and platform-based work.
Traditionally, the ESI Scheme has been associated with factory and shop-floor workers. Over time, however, it has evolved into a wider framework, delivering Employees’ State Insurance benefits in India, such as:
- comprehensive medical treatment for insured persons and their families;
- cash benefits during periods of sickness or maternity;
- compensation for employment-related injury or disablement; and
- dependants’ benefits in the event of an employee’s death.
Social Security Code 2020 compliance for employers creates obligations that must be addressed at the outset. This involves:
- registration of establishments through the notified online ESIC portal;
- regular and timely contribution of both employer and employee shares to the ESI fund;
- maintaining updated records of employees and wage data; and
- ensuring that new categories of eligible workers are properly enrolled.
At the same time, questions of ESI Scheme eligibility and registration process are becoming more nuanced. Establishments must examine wage thresholds, headcount, and whether their operations now fall within the extended ambit of the Code.
Placed within the larger ambit of labour law reforms under India’s Social Security Code, the ESI Scheme framework illustrates how the law is attempting to balance worker protection with the realities of modern employment.
2. Understanding the Employees’ State Insurance (ESI) Scheme
The Employees’ State Insurance Scheme has been part of India’s labour framework for more than seven decades. Created under the Employees’ State Insurance Act, 1948, it was one of the first attempts to secure industrial workers against risks arising from sickness, maternity, and accidents at work. Over time, the scheme expanded beyond factories and came to include shops, hotels, transport undertakings and later several categories in the services sector.
With the passage of the Code on Social Security, 2020, these provisions are now consolidated. The Code keeps the ESI Scheme intact but also provides scope for its expansion. This makes the ESI Scheme Coverage under Social Security Code 2020 important for both employers and employees because it signals continuity with the past but also introduces flexibility for the future.
Historical Context
- The ESI Act was passed in 1948 in response to growing concern for workers in a rapidly industrialising economy.
- It set up a self-financing scheme based on contributions from both employers and employees.
- The scheme was administered by the Employees’ State Insurance Corporation (ESIC), which continues to operate today.
It is pertinent to note that the ESI Scheme has steadily moved from a purely industrial focus to a wider coverage, reflecting the change in India’s employment structure.
Benefits under the ESI Scheme
The Scheme is contributory in nature and provides a defined set of Employees’ State Insurance benefits in India. These include:
- Medical benefits for insured employees and their families through ESI Scheme hospitals and dispensaries.
- Sickness benefit is a cash payment during certified illness.
- Maternity benefit for insured women, aligned with broader maternity legislation.
- Disablement benefit in case of temporary or permanent injury.
- Dependants’ benefit payable to family members on the death of an insured person.
- Funeral expenses and certain additional welfare measures in specific cases.
Compliance and Employer’s Role
Under the Social Security Code 2020, compliance for employers has become more structured. Employers are expected to:
- register establishments promptly on the notified portal;
- calculate and deposit contributions within prescribed timelines;
- maintain records in digital form; and
- Cooperate with ESIC inspections.
The obligations are not new, but the Code places them in a single framework, increasing transparency and reducing excuses for delay.
Comparative Position
| Aspect | Earlier ESI Act, 1948 | Code on Social Security, 2020 |
| Coverage | Factories and notified establishments | Broader scope, room to include gig and platform workers |
| Wage limit | ₹21,000 per month (₹25,000 for Persons with Disability) | Same threshold, but easier to revise by notification |
| Benefits | Medical, sickness, maternity, disablement, dependants | Same benefits with scope for digital delivery |
| Administration | ESIC as statutory corporation | ESIC continues under the Code framework |
ESI Scheme as Part of Labour Reforms
The larger objective of labour law reforms under the Indian Social Security Code is to simplify compliance while ensuring that workers are not left out of protection. In this framework, the ESI Scheme eligibility and registration process has been amended. Employers in new sectors, particularly services and platform-based industries, will need to test whether they fall within coverage and prepare their compliance mechanisms accordingly.
ESI Scheme Coverage Under the Social Security Code 2020
The Code on Social Security, 2020, replaces nine central laws, including the Employees’ State Insurance Act, 1948. The ESI Scheme continues, but the Code shifts how coverage is determined and how compliance is handled. For employers, understanding the ESI Scheme coverage under Social Security Code 2020 is critical because the framework is wider and the enforcement stricter.
Expansion of Coverage
The earlier ESI Act, 1948, applied mainly to factories and a few notified establishments. Under the Code:
- Factories with ten or more workers remain covered.
- The Central Government now has explicit power to extend the scheme to “any other class of establishments.”
- The wage ceiling for coverage is still ₹21,000 (₹25,000 for employees with disabilities). What changes is that this figure can now be revised by notification, rather than amending the law itself.
This means Employees’ State Insurance benefits in India are not frozen in time. The scope can be widened without Parliament having to revisit the statute.
Gig and Platform Workers
The Code introduces gig workers and platform workers. These terms were absent in 1948. Though detailed schemes are still awaited, the Code permits the government to design welfare measures for such workers. Aggregators and digital platforms may be asked to contribute.
This is a shift from the old idea of insurance being linked only to “employer–employee” relationships. In time, ESI Scheme coverage under Social Security Code 2020 could include those working in app-based or flexible arrangements that fit into the broader labour law reforms in India under Social Security Code agenda.
Voluntary Coverage and Exemptions
Two other features are worth noting:
- Establishments not automatically covered may voluntarily opt in.
- Employers who already provide benefits that are at least equal to ESIC can apply for exemption.
Unlike under the Employees’ State Insurance Act, 1948, exemptions are not indefinite. They require periodic review and renewal, which reduces misuse.
Sectoral Reach
Coverage is no longer limited to factories. The Code gives space to include:
- service industries such as IT/ITES and BPOs,
- start-ups and MSMEs (phased enforcement possible),
- retail, logistics, and hospitality establishments.
Once notifications are issued, Social Security Code 2020 compliance for employers in these sectors will become compulsory.
Key Differences from 1948 Act
| Aspect | ESI Act, 1948 | Social Security Code, 2020 |
| Coverage | Factories + notified units | Broader power to notify new classes, including services |
| Wage ceiling | ₹21,000 (₹25,000 for disabled) | Same, but easier to revise |
| Compliance | Paper-based, fragmented | Unified, digital, stricter ESIC eligibility and registration process |
| Exemptions | Granted, often indefinite | Granted, subject to review and renewal |
| Penalties | Lower, outdated | Enhanced, aligned with digital monitoring |
Practical Takeaways
- The scheme is continuous but more adaptable.
- Employees’ State Insurance benefits in India are protected and may cover new worker groups.
- Employers should prepare for digital filings and tighter timelines.
- The ESI Scheme eligibility and registration process will be a routine compliance requirement.
- As part of the labour law reforms in India under Social Security Code 2020, ESI Scheme is moving closer to a universal model of social coverage.
Employer Obligations under ESI Scheme in the New Code
The Code on Social Security, 2020 carries forward the contributory model of the ESI Scheme. What changes is the manner of compliance – registration, filings, contributions – all of which have been brought within a common digital system. For employers, the duty to comply with the ESI Scheme coverage under Social Security Code 2020 is not cosmetic. It is a statutory requirement, and lapses can lead to significant penalties.
Registration of Establishments
Under the earlier law, registration was often manual and could be delayed. The Code now requires:
- registration of every establishment that falls within the notified class;
- filings through the Shram Suvidha Portal; and
- enrolment of eligible employees within the prescribed time.
In practice, the ESI Scheme eligibility and registration process has moved to a single, online interface. This reduces the space for discretion, but it also means delays or defaults are visible almost immediately.
Contribution Mechanism
The Scheme continues as contributory:
- Employer’s contribution fixed at 3.25% of wages;
- Employee’s contribution at 0.75%;
- Contributions payable within 15 days of the close of each month; and
- Coverage up to a wage ceiling of ₹21,000 (₹25,000 for employees with disability).
These contributions sustain the Employees’ State Insurance benefits in India, and the liability for timely deposit rests squarely on the employer.
Records and Returns
Employers are expected to maintain wage and employee records in digital form. Returns have to be filed electronically. Cross-checking is done through the unified portal. This is intended to tighten Social Security Code 2020 compliance for employers and leaves little room for paper-based adjustments.
Penalties
The Code prescribes higher penalties than before.
- Failure to deposit contributions can attract fines up to ₹50,000.
- Repeat defaults may lead to imprisonment for up to two years and fines of up to ₹3 lakh.
- Even delays in filing or obstructing inspection can invite prosecution.
It is pertinent to note that under the Code, offences are taken seriously, and compliance is treated as a strict liability.
Inspections
Inspection powers remain wide. Officers can demand records, question employees, and enter establishments. Reports are now generated digitally, which reduces discretion but increases traceability. Random inspections based on filings are also possible.
For employers, this means the ESI Scheme eligibility and registration process and contribution schedules must be integrated into payroll and HR systems. Missing deadlines or attempting to delay filings will be visible in real time.
Table: Employer’s Key Duties under CSS 2020
| Obligation | Requirement | Practical Effect |
| Registration | Shram Suvidha Portal | Establishment recognised by ESIC |
| Contributions | Employer 3.25%, Employee 0.75% | Employees access Employees’ State Insurance benefits in India |
| Records | Digital wage and contribution records | Greater transparency |
| Returns | Periodic, electronic filing | Part of Social Security Code 2020 compliance for employers |
| Penalties | Fines and imprisonment | Higher risk of liability |
| Inspections | Physical + digital | Lapses easily detected |
5. Benefits for Employees and Insured Persons
The central object of the scheme has always been to provide security in times of need. Under the new framework, the Employees’ State Insurance benefits in India remain substantially the same, but the Code gives flexibility for wider delivery and for including more categories of workers in the future. It is important to see the benefits not in isolation but as part of the larger safety net that the ESI Scheme coverage under Social Security Code 2020 seeks to maintain.
Medical Benefits
The most visible feature of the scheme is medical care.
- Insured employees and their families have access to dispensaries, panel clinics, and ESIC hospitals.
- Outpatient and inpatient care, specialist services, and medicines are provided without separate charge.
- The three-tier system – local dispensary, secondary panel hospital, and tertiary ESIC hospital – continues.
These services are funded through monthly contributions, and their value lies in reducing out-of-pocket costs for workers who may not otherwise afford treatment.
Sickness Benefits
Cash benefits during illness remain a critical feature.
- Normal sickness: 70% of wages, available for up to 91 days in a benefit period.
- Extended sickness: for long-term diseases notified by the Corporation, payable for up to two years.
- Enhanced sickness: full wage when an insured person undergoes sterilisation procedures.
In practice, these measures allow workers to step away from work temporarily without the fear of complete income loss.
Maternity Benefits
Women employees remain entitled to their full wage during maternity leave. The scheme also supports pre-natal and post-natal care. These provisions mirror the Maternity Benefit Act but are financed through the contributory pool. The intent is clear – that maternity protection is part of Employees’ State Insurance benefits in India, not an optional add-on.
Disablement and Dependants’ Benefits
Employment injuries are covered extensively.
- Temporary disablement: 90% of wages until the employee recovers.
- Permanent disablement: pension for life, calculated on the assessed loss of earning capacity.
- Dependants’ benefit: payable every month to family members in case of death due to employment injury.
These benefits underline the insurance character of the scheme, where risks are pooled and relief is assured.
Funeral and Other Benefits
Additional benefits exist as well. A lump sum for funeral expenses (currently ₹15,000) is payable. In areas without ESIC facilities, confinement expenses are provided to insured women. Vocational rehabilitation and re-employment support are available in cases of permanent disability.
Practical Implications of ESIC under Social Security Code 2020
The Code on Social Security, 2020, was meant to consolidate. But when we speak of the ESI Scheme, the real story is how employers and employees deal with it on the ground. The ESI Scheme coverage under Social Security Code 2020 is not just a matter of reading the sections – it plays out differently in small factories, in tech offices, and even for workers attached to platforms.
MSMEs and Startups
For small enterprises, the first question is always cost. Contributions under the ESI Scheme add to the wage bill.
- 3.25% from the employer, 0.75% from the employee.
- For a business running on thin margins, this is not trivial.
At the same time, access to Employees’ State Insurance benefits in India gives credibility. When an MSME tells its staff they are covered for medical treatment and sickness benefits, it matters. Startups, particularly in technology and logistics, see value in voluntary enrolment. Some do it not because they are forced, but because investors ask about compliance.
The ESI Scheme eligibility and registration process being online means there is little scope to delay. Once you are in the system, filings are visible, and defaults stand out. Earlier, some smaller units would stay below the radar. That space has shrunk.
IT/ITES and Remote Workforces
This sector was mostly outside the Employees’ State Insurance Act, 1948. Under CSS 2020, nothing stops the government from notifying coverage of this sector.
If that happens, IT companies with more than ten eligible employees will be covered. Remote work creates complications – is an employee working from home in another state “part of” the establishment? Payroll systems will need restructuring. Social Security Code 2020 compliance for employers becomes heavier when staff are scattered across states.
This kind of shift in the labour law reforms for India under Social Security Code bringing ESI Scheme to service industries that never thought about the Scheme before.
Compliance vs Ease of Doing Business
The government claims simplification. Employers see more compliance.
- All filings now go through the Shram Suvidha portal.
- Penalties for delay are higher, and prosecution is easier.
- Inspections are partly digital, which means discrepancies get flagged automatically.
So, while the process is centralised, for many employers it feels stricter, not easier. The ESI Scheme coverage under Social Security Code 2020, is both a worker safety net and an extra management responsibility.
State and Central Tensions
The law is central, but delivery is local.
- Some states lack hospitals, so coverage on paper does not mean services in reality.
- Rule-making is uneven; some states are quick, others still lag.
- Enforcement is inconsistent – aggressive in one state, dormant in another.
For a company operating across states, the ESI Scheme eligibility and registration process may look uniform, but the experience is not. Compliance in one state may be straightforward; in another, it may involve repeated queries.
Judicial Perspective
Courts have long leaned towards wider coverage.
- The Supreme Court has said “employee” under the ESI Act, 1948, is a broad term – not just direct workers but also those in incidental work.
- High Courts have held that once an establishment qualifies under the ESI Act, 1948, it remains covered even if headcount drops.
- Courts have taken the view that benefit provisions should be read liberally, while penalty clauses should be read strictly.
In effect, Social Security Code 2020 compliance for employers is treated as mandatory, with little sympathy for lapses.
7. Comparative Overview: ESI Scheme under Old ESI Act vs New Code
The Employees’ State Insurance Scheme has been carried forward into the Code on Social Security, 2020. It is not a new scheme. The old law – the Employees’ State Insurance Act, 1948, is repealed, but the idea remains. What changes is the framework. The ESI Scheme Coverage under Social Security Code 2020, sits inside a larger, centralised code. Employers need to understand what is different and what is not.
Scope of Coverage
Under the ESI Act, 1948:
- factories were automatically covered under the Act;
- other establishments had to be notified by the government for inclusion; and
- The wage ceiling (₹21,000, and later ₹25,000 for employees with disability) could only be altered by amendment.
Under CSS 2020:
- factories continue to be covered under the Code;
- The government may extend coverage to any class of establishments by simple notification, and
- Wage ceilings can be revised without going back to Parliament.
The effect is flexibility. Employees’ State Insurance benefits in India can be rolled out faster to new groups of workers. Once the IT firms, retail chains, and even digital platforms are notified, they fall under the ESI Scheme.
Contributions
The structure of the ESI Scheme does not change. It is still a contributory scheme.
- The employer pays 3.25%.
- The employee pays 0.75%.
- Payments must be made within 15 days of the close of each month.
The difference is in the mechanism. Under the old Act, filings and payments were often manual. Under CSS 2020, everything runs through the central portal. For Social Security Code 2020 compliance for employers, there is very little room for delay.
Benefits
Benefits remain familiar: medical, sickness, maternity, disablement, dependants’ benefits. That has not been diluted.
What the Code does is allow expansion. Gig and platform workers – terms unknown to the 1948 law – are now defined. Once the government issues a scheme, these categories may also receive Employees’ State Insurance benefits in India.
Penalties and Enforcement
The old Act prescribed modest penalties. Inspections were manual, often inconsistent.
The new Code adopts a stricter approach:
- higher fines;
- repeat defaults may lead to imprisonment.
- inspection reports are generated digitally; and
- defaults traceable in real time.
Once the ESI Scheme eligibility and registration process is completed, obligations are binding and visible.
Employer Takeaways
- Coverage under the Scheme is broader.
- Contributions are unchanged, but timelines are stricter.
- Benefits preserved, with scope for new categories.
- Exemptions are possible, but subject to review.
- Enforcement of the law is digital, quicker, and harder to escape.
The labour law reforms in India under Social Security Code are not about dismantling ESI Scheme. They are about making it wider, more flexible, and more tightly enforced.
Table: Old vs New
| Aspect | ESI Act, 1948 | Code on Social Security, 2020 |
| Coverage | Factories + notified units | Broader, by notification; gig/platform workers possible |
| Wage ceiling | ₹21,000 / ₹25,000 (disabled) | Same, easier to revise |
| Contributions | Employer 3.25%, Employee 0.75% | Same, stricter deadlines, digital |
| Benefits | Medical, sickness, maternity, disablement, dependants | Same, plus scope for expansion |
| Enforcement | Manual, lower penalties | Digital, higher penalties, strict oversight |
| Registration | Paper filings | Unified ESI Scheme eligibility and registration process online |
8. ESIC for Gig, Platform, and Unorganised Workers
The Code on Social Security, 2020, for the first time speaks of categories such as a gig worker, a platform worker, and the unorganised worker. None of these found a place in the ESI Act, 1948. Their appearance in the new Code shows how the labour law reforms in India under the Social Security Code are meant to move with the workforce and not remain tied only to factories and shop floors.
What the Code Says
The Code defines:
- A gig worker is someone engaged outside a traditional contract of service, usually on task-based or assignment-based arrangements.
- A platform worker is someone who earns through a digital or online platform, e.g., drivers, delivery staff, app-based service providers, and
- An unorganised worker is any worker not already covered under EPF, ESIC, or related laws.
It is pertinent to note that these are enabling definitions. The law recognises them, but Employees’ State Insurance benefits in India will reach them only if the government frames specific schemes.
What Benefits May Look Like
In practice, once notified, schemes could extend some of the following under the ESI Scheme coverage under Social Security Code 2020:
- medical treatment, not necessarily through ESI Scheme hospitals, but also empanelled private centres;
- sickness or partial wage replacement for periods of certified illness;
- accident or disablement benefits, highly relevant to two-wheeler delivery staff; and
- maternity cover for women workers on platforms.
But these remain proposals. The Code is an enabling law that lays down the framework and authority, while the details of coverage and benefits will come only through government notifications.
Why the Unorganised Sector Is Difficult
Extending coverage to unorganised workers raises problems:
- Identification: Millions of informal workers are without proper records.
- Contribution: Workers move frequently, jobs are seasonal, making collection difficult.
- Infrastructure: ESI scheme facilities are concentrated in industrial areas, not rural or semi-urban belts; and
- Awareness: Many workers do not understand deductions, and some even resist formal registration.
So, while the Code allows it, rolling out Employees’ State Insurance benefits in India to the unorganised sector will take heavy administrative support.
Aggregators and Contribution
The Code brings digital platforms, referred to as aggregators, into the social security framework. In simple terms, digital platforms will have to share the cost through a model where:
- A notified percentage of their revenue may go to the fund.
- Workers may contribute a small sum, and
- the government may add a portion to bridge the funding gap.
This creates a three-way model. It also changes the ESI Scheme eligibility and registration process as workers may need to register individually on designated portals, while platforms make consolidated payments on their behalf.
Comparison Table
| Aspect | ESI Act, 1948 | Code on Social Security, 2020 |
| Recognition of gig/platform | Not mentioned | Defined categories |
| Unorganised workers | Outside law | Brought into framework |
| Benefits | Limited to employees | Scope to extend under new schemes |
| Contributions | Employer + employee | Aggregator + worker + govt. |
| Registration | Establishment-based | Individual + platform-linked |
Observations
- The ESI Scheme coverage under Social Security Code 2020, is no longer confined to factories.
- For digital businesses and logistics operators, Social Security Code 2020 compliance for employers will eventually mean making aggregator contributions.
- The ESI Scheme eligibility and registration process will not mirror the factory model, and it will rely on digital platforms, central databases, and bulk filings.
- In this way, the labour law reforms in India under Social Security Code do more than consolidate laws; they redefine who the law recognises as a worker.
9. Compliance Roadmap for Employers
The obligations under the ESI Scheme coverage under Social Security Code 2020, are not new in principle, but the way they are enforced is. Earlier, a factory could delay filings or keep records on paper without too much visibility. With the Code, once an establishment is registered, the system tracks everything. For employers, this means compliance is not simply paying contributions; it is contracts, payroll, HR policies, and regular audits.
Registration under the Code
The first question is coverage. Does the establishment have ten or more persons, are wages within the ceiling, and is the sector notified? Once that threshold is met, registration cannot be postponed.
- Registration is now only through the Shram Suvidha Portal.
- The employer receives a unique ESIC registration number.
- Employee details and wage records are uploaded, and insurance numbers are generated.
It is pertinent to note that the ESI Scheme eligibility and registration process is no longer a back-office task. It is digital, time-bound, and defaults show up quickly.
Contracts and HR Documentation
Employment contracts need to reflect statutory deductions. By contrast, many older contracts only spoke of “statutory benefits” in generic terms. Now:
- Contracts must carry a clause on ESIC contributions, both the employer and employee share.
- Reference to obligations under the Social Security Code 2020 compliance for employers should be explicit, and
- wage components must be defined clearly to avoid later disputes.
Employees should also be informed in writing of their entitlements under the scheme.
Payroll and Contributions
Payroll systems have to be aligned with compliance requirements. In practice, this means:
- Deduction of 0.75% from the employee’s salary;
- Addition of 3.25% from the employer;
- Deposits within 15 days of the month-end; and
- Returns filed quarterly.
Automated payroll software is essential because a missed deadline affects access to Employees’ State Insurance benefits in India.
Internal Audits and HR Policy Alignment
Compliance is not a one-time process. Policies on leave, sickness, or maternity must align with ESIC rules so there is no contradiction. Employers should:
- run periodic internal audits of ESIC filings;
- cross-check headcount regularly; and
- train HR staff on ESIC procedures.
It is pertinent to note that inspections under the Code are more structured, and digital reports leave little room for negotiation.
Keeping Track of Notifications
The law is central, but the rules are state-framed. Employers must keep an eye on:
- notifications extending coverage to new sectors;
- revisions of wage ceilings;
- state-level relaxations or exemptions; and
- expansion of ESIC hospitals and dispensaries.
The labour law reforms in India under Social Security Code are an ongoing process. Compliance today may be extended to other sectors, and employers in services or platform-based work should prepare early.
Table: Compliance Roadmap Snapshot
| Area | Requirement | Comment |
| Registration | Through Shram Suvidha | Digital, quick, visible |
| Contracts | Clear ESIC clauses | Avoid disputes |
| Payroll | 3.25% + 0.75% | Automate to stay on time |
| Audits | Periodic checks | Reduces penalty risk |
| Notifications | Central + state | Coverage can expand suddenly |
Key Judicial and Administrative Updates
The ESI Scheme Coverage under Social Security Code 2020 is not just a matter of statutory text. Courts and government notifications shape how it is applied. Employers have to watch for both the judicial interpretation and the administrative rollout to remain compliant and to ensure their workers get the full scope of Employees’ State Insurance benefits in India.
Supreme Court and High Court Rulings on ESI Scheme Applicability
It is pertinent to note that Indian courts have consistently read ESI laws in favour of wider coverage.
- The Supreme Court has held that the word “employee” under ESI Act, 1948, is to be read broadly. Workers engaged in incidental or connected work are also covered.
- High Courts have ruled that once an establishment qualifies, coverage continues even if later the number of employees falls below the threshold.
- Courts have also stressed that benefit provisions are to be interpreted liberally, while penalty clauses must be read strictly.
In practice, this means Social Security Code 2020 compliance for employers cannot be avoided on technical grounds. Once in, the employer stays bound.
Recent Notifications from the Ministry of Labour & Employment
The Ministry has issued notifications to expand ESI Scheme coverage step by step.
- Wage ceilings have been revised periodically; the present limit is ₹21,000 (₹25,000 for employees with disabilities).
- Notifications have extended coverage to more districts, including semi-urban and rural areas.
- Schemes for construction and service sector workers are under consultation.
These notifications are the mechanism through which Employees’ State Insurance benefits in India spread beyond factories. The Code makes such extensions easier, as the government can do so by executive order rather than amending the statute.
State Amendments/Rules under CSS 2020 impacting ESI Scheme
Though the Code is central, states frame rules and carry out implementation.
- Some states have already aligned their rules with CSS 2020.
- Others are slower; gaps remain in rule-making and in hospital infrastructure.
- State ESIC offices issue circulars on compliance timelines, inspection procedures, and exemptions.
This creates an uneven experience. Employers with operations across states find the ESI Scheme eligibility and registration process smooth in one state, cumbersome in another. By contrast, under the ESI Act, 1948, such differences were less visible because most filings were local and manual.
Future Outlook – Government Expansion of ESIC Hospitals and Dispensaries
The government has spoken of expanding ESIC facilities.
- New hospitals are being set up in tier-II and tier-III towns.
- Existing dispensaries are being upgraded with digital record systems.
- Telemedicine services are being piloted to reach workers in remote areas.
This expansion is critical. Without adequate infrastructure, the ESI Scheme coverage under Social Security Code 2020 remains on paper. For employers, this means that even as contributions are collected more rigorously, pressure will mount on the state to deliver visible Employees’ State Insurance benefits in India.
Conclusion
The ESI Scheme coverage under Social Security Code 2020 is not just a continuity of the old ESI Act, 1948, it is a repositioning of how India looks at social protection. For employees, it secures access to healthcare and wage support in difficult times. For employers, it reshapes compliance, linking contributions and filings to digital systems. The Employees’ State Insurance Scheme remains central, but its reach and enforcement now fall within the broader framework of the labour law reforms in India under Social Security Code.
Re-emphasising the Importance of the ESI Scheme in Worker Protection
It is pertinent to note that the scheme is more than just statutory contributions. It delivers:
- medical care through ESIC hospitals and dispensaries;
- sickness and maternity relief;
- disablement and dependants’ pensions; and
- smaller but vital benefits like funeral expenses.
These Employees’ State Insurance benefits in India have prevented families from falling into financial distress. The Code ensures they are preserved and ready for expansion.
Opportunities for Employers – Compliance as ESG/CSR
By contrast to the older view of ESI Scheme as a burden, many employers now see value in compliance.
- It enhances credibility with workers, especially younger staff who value social protection.
- Investors look favourably on businesses that meet Social Security Code 2020 compliance for employers as part of their governance record.
- Some employers align ESI Scheme participation with CSR and ESG frameworks, presenting it as part of responsible business conduct.
The ESI Scheme eligibility and registration process, therefore, is not only a legal duty but also a reputational opportunity.
The Road Ahead – Aligning with Global Standards
India’s approach to the ESI Scheme is increasingly compared to global models of social security. By consolidating under CSS 2020:
- coverage can be extended faster;
- digital filings make compliance more transparent; and
- The scope exists to include gig and platform workers, aligning with international debates on new forms of work.
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