Total Visitors 
Online Users 
Today 
Yesterday 
A Quick Compliance Alert for Employers
The Employees’ State Insurance Corporation (ESIC) has issued a significant clarification [PFB notification copy] that every educational institution and medical institution in Maharashtra needs to pay attention to. This update clarifies the applicability of the Code on Social Security, 2020 to these specific sectors.
The Short Version
Here is the gist: Educational institutions and medical institutions in Maharashtra are now covered under the ESI Scheme with effect from 21 November 2025, pursuant to the implementation of the Code on Social Security, 2020.
What This Means for You:
- No separate state notification is required to bring your establishment under the ESI umbrella.
- The liability to pay ESI contributions under Section 29 of the Code arises from 21 November 2025, subject to fulfillment of statutory conditions.
- All field offices have been directed to ensure strict compliance and take necessary action for coverage of all eligible establishments.
The Full Story: Understanding the Background
Let us rewind a bit to understand what has happened.
What Happened Earlier (The Abeyance Period):
On 30 January 2026, the Government of Maharashtra issued a notification extending ESI coverage to educational and medical institutions employing 10 or more persons. However, on 12 February 2026, ESIC issued a circular putting the implementation of this notification in abeyance (on hold) until further orders.
The reason? The ESI Act, 1948, had been repealed and replaced by the Code on Social Security, 2020, which came into effect on 21 November 2025. The legal basis for the notification no longer existed.
The Latest Clarification (The Current Position):
On 27 July 2026, ESIC Headquarters issued a clarification, and the Regional Office, Mumbai, followed up with a circular. The key message: since the Code on Social Security, 2020 has already taken effect, coverage is now governed by Section 1(4) read with the First Schedule of the Code and no separate state notification is required for establishments to be covered.
The result? All eligible educational and medical institutions in Maharashtra are now covered under the ESI Scheme, with effect from 21 November 2025.
What This Means for Your Institution
Q: Am I covered?
If you operate an educational or medical institution in Maharashtra and employ ten or more persons (excluding seasonal factories), the provisions of Chapter IV (Employees’ State Insurance) of the Code apply to your establishment.
Q: What if I have less than 10 employees?
The Code provides for voluntary registration under Section 1(7) for establishments having less than 10 employees. You may choose to register voluntarily.
Q: What about hazardous occupations?
ESI coverage applies to any establishment that carries on hazardous or life-threatening occupations as notified by the Central Government – in which even a single employee is employed.
Q: What is the revised definition of “wages”?
The Code has significantly expanded the definition of “wages” under Section 2(88). Importantly, if the aggregate of excluded components exceeds 50% of an employee’s total pay, the amount exceeding 50% will be deemed to be “wages” for contribution calculation purposes.
Key inclusions and exclusions:
| Component | Status |
| Basic Pay, Dearness Allowance, Retaining Allowance | Included |
| Bonus, HRA, Conveyance Allowance, Overtime, Commission | Excluded (with a 50% cap rule) |
| Value of house accommodation, light, water, medical attendance | Excluded |
| Employer’s PF/Pension contributions | Excluded |
Q: What should I do now?
- Review Your Employee Count:Â Check if you employ 10 or more persons at your establishment.
- Calculate Wages Accurately:Â Understand the new wage definition and apply it correctly for contribution calculation.
- Register:Â If you are eligible, ensure registration is completed. ESIC has directed unregistered institutions to complete online registration through the “Shram Suvidha Portal” to generate an employer code.
- Pay Contributions: Contributions are due from 21 November 2025 – assess any arrears liability.
- Seek Professional Advice:Â Given the complexity, consult with a legal or compliance expert to ensure full compliance.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy of the information, readers are advised to consult with a qualified legal or compliance professional for advice specific to their situation. Laws and interpretations may change, and professional guidance is essential for ensuring full compliance.