ESIC New Rules: Your salary is ₹21,000, yet you're worried about medical expenses! The government has introduced ESIC, learn the rules..

If your salary is around ₹21,000 and you're worried about medical expenses, this news is useful. The scope of ESIC is likely to expand after the implementation of the new Labor Code (Code on Social Security, 2020). However, its full impact will only be visible when the government formally implements its detailed rules.

In reality, very few people apply to the Employees' State Insurance Corporation (ESIC). Now, with the implementation of the new Labor Code, more employees will benefit from the ESI scheme. The government has created this new system by combining various social security laws to provide better access to medical care and financial assistance to working people.

What are the current rules?

Currently, the Employees' State Insurance (ESI) scheme is available only to employees whose monthly salary is up to ₹21,000 (₹25,000 for disabled employees).

The ESI scheme is contribution-based:
Employee: 0.75% of salary
Employer: 3.25% of salary
Total: 4% monthly contribution
This amount is deposited every month, and in return, the employee and their family receive medical and cash benefits.

What is the new change?
The most significant change is the definition of "wages." According to the new code, if an employee's salary, including allowances such as bonuses, HRA, and overtime, exceeds 50% of the total salary, the additional amount will be added to the salary. This change may also make some employees previously excluded from ESI eligible. However, it is important to clarify that this effect will only be fully implemented after the final notification of the relevant rules.

ESIC Contributions and Benefits
Contribution Rate 0.75% 3.25% 4%
Salary Limit ₹21,000 (subject to regulations) -
-
What is required of companies?

Eligible organizations are required to register with ESIC.
All eligible employees must be registered.
Timely contributions must be deposited.
Failure to comply with the rules may result in action.
What benefits are available from ESI?
Under the ESI scheme, the employee and their family receive:
Free treatment (OPD and hospitalization)
Medicines and tests
Cash assistance during illness
Maternity benefits
Temporary or permanent disability benefits
Financial assistance to dependents in case of death at the workplace

What about gig and platform workers?
The new labor code includes gig and platform workers in the definition of social security.
When and how will they receive direct ESI benefits?
This will depend on separate schemes developed by the government.
What does it mean for employees?
If your salary is around ₹21,000 or your salary structure includes higher allowances,
you should check whether you are covered by ESI. The new labor code is a step towards strengthening social security.
But its full impact will only be clear after the notification of detailed rules.
[ESIC Contributions and Benefits: At a Glance]
Details Employee Contribution Employer Contribution Total Contribution
Contribution Rate 0.75% 3.25% 4%
Salary Limit ₹21,000 (Subject to rules) - -

What is the new rule?
If an employee's salary, including allowances such as bonuses, HRA, and overtime, exceeds 50% of the total salary, that additional portion will also be considered part of wages. This means that due to this new calculation of wages, many employees who were previously excluded from the ESI coverage due to their salary structure will now be covered under the ESI.

Understand the whole thing in short words.
The new Labor Code 2025 is an important step towards expanding ESIC coverage. In fact, it could provide medical and financial security to more employees. However, the outcome will depend on the formal notification of the rules. Therefore, both employees and employers need to stay updated.

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