The Employees State Insurance Corporation (ESIC) under the Code on Social Security, 2020 (“Code”) represents a significant step in India’s labour welfare framework. The Code consolidates multiple social security laws into a unified system with the objective of extending social protection to all categories of workers, including those in the unorganised, gig, and platform sectors. Within this broader framework, ESIC continues to function as an important institution providing health insurance and income security through benefits such as medical care, sickness, maternity, disablement, and dependants’ support. The Code not only retains the foundational structure of the earlier scheme but also expands its coverage, digitises compliance, and enables the Government to extend benefits to a wider workforce.

Who appoints the principal officers of the Corporation?

The Central Government appoints a Director General and a Financial Commissioner, who act as the principal officers of the Corporation.

What is the tenure of the Director General and Financial Commissioner?

They hold office for a period specified in their appointment order, not exceeding five years.

Are they eligible for re-appointment?

Yes, they are eligible for re-appointment if otherwise qualified.

What remuneration do they receive?

They receive salary and allowances as prescribed by the Central Government.

What are their powers and functions?

They exercise powers and discharge duties as prescribed by the Central Government and perform functions specified in regulations.

Who is disqualified from being appointed to these posts?

Any person subject to the specified disqualifications applicable under the law cannot be appointed.

Can they be removed from office?

Yes, the Central Government may remove them at any time and must do so if a two-thirds majority resolution of the Corporation recommends removal.

Can the Corporation appoint other staff?

Yes, it may employ officers and employees necessary for efficient functioning and responsibilities assigned by the Central Government.

Is approval required for creating high-salary posts?

Yes, prior sanction of the Central Government is required if the salary exceeds a prescribed limit.

How are service conditions determined?

Through regulations aligned with rules applicable to Central Government employees in similar pay scales.

What about specialists and super specialists?

Their service conditions, including pay, shall be similar to equivalent posts in institutions like AIIMS or similar institutions.

Can deviations from Central Government rules be made?

Yes, but only with prior approval of the Central Government.

Does this apply to contractual consultants?

No, contractual consultants and specialists are excluded.

How are corresponding pay scales determined?

Based on qualifications, recruitment method, duties, and responsibilities. Doubts are referred to the Central Government whose decision is final.

Are certain appointments made in consultation with UPSC?

Yes, appointments corresponding to Group A and B gazetted posts require consultation with UPSC.

Are temporary appointments exempt?

Yes, temporary or officiating appointments up to one year are exempt.

Do such temporary appointments confer rights?

No, they do not confer claims for regular appointment or seniority benefits.

Who decides if a post corresponds to Group A or B?

The Central Government, and its decision is final.

What constitutes the Employees’ State Insurance Fund?

All contributions, user charges, and other moneys received by the Corporation.

Are user charges treated as contributions?

Yes, for certain beneficiaries, user charges are deemed contributions.

Can the Corporation accept donations?

Yes, it may accept grants, donations, CSR funds, and gifts.

Where are the funds deposited?

In approved banks under an account of the Fund.

Who operates the Fund account?

Authorized officers approved by the Standing Committee and Corporation.

How are funds invested?

As prescribed by the Central Government.

For what purposes can the Fund be used?

It may be used for benefits, medical care, administrative expenses, hospitals, contributions to governments or agencies, audits, legal costs, court expenses, contracts, decrees, litigation, welfare measures, and other approved purposes.

Can the Corporation own property?

Yes, it may acquire, hold, transfer, and manage movable and immovable property.

Can it invest surplus funds?

Yes, funds not immediately required may be invested.

Yes, with prior sanction of the Central Government.

Can it create benefit funds for employees?

Yes, such as provident or other benefit funds.

Every employee in applicable establishments must be insured.

Who is an “Insured Person”?

An employee entitled to benefits due to contribution payments.

What are contributions composed of?

Employer’s contribution and employee’s contribution.

Who prescribes contribution rates?

The Central Government.

What is the wage period?

The unit specified for contribution calculation.

When are contributions due?

Usually on the last day of the wage period.

Who regulates administrative expenses?

The Central Government prescribes limits and types.

Who pays contributions?

The employer pays both employer’s and employee’s contributions.

Can employers recover employee contributions?

Yes, by wage deduction only, subject to conditions.

Can employers recover their own contribution?

What is the nature of deducted contributions?

They are deemed entrusted to the employer.

Who bears remittance expenses?

Can employer recover from contractor?

Yes, for employees hired through contractors.

What are contractor obligations?

Maintain employee register and submit to employer.

What benefits are provided?

Sickness, maternity, disablement, dependants’, medical, and funeral benefits.

Can medical benefits extend to families?

Yes, subject to conditions.

Who prescribes eligibility and rates?

The Central Government.

Can the Corporation promote welfare measures?

Yes, including rehabilitation and re-employment.

When is an accident presumed work-related?

If it occurs during employment, unless proved otherwise.

Are commuting accidents covered?

Yes, if nexus with employment is established.

Are rescue acts covered?

Yes, if done in emergencies at workplace.

When is disease considered employment injury?

When contracted under specified conditions related to employment.

What does the medical board decide?

Extent of disablement and loss of earning capacity.

Can decisions be reviewed?

Yes, based on fresh evidence or worsening condition.

Yes, to medical appeal tribunal or Insurance Court.

When death results from employment injury.

Can decisions be reviewed?

Yes, based on changes like marriage, age, or death.

Insured persons and their families where applicable.

What forms of treatment are available?

Outpatient, inpatient, home visits, etc.

Can medical institutions be established?

Yes, including training and educational institutions.

Who provides medical treatment?

Primarily the State Government.

Can Corporation also provide treatment?

Yes, through its own facilities or agreements.

Can benefits be commuted?

Generally no, except as provided.

Can multiple benefits be claimed together?

No, only one benefit for the same period.

What happens on wrongful receipt?

Amount must be repaid.

What if employer fails to insure or contribute?

Corporation may pay benefits and recover from employer.

Who bears excess sickness cost due to poor conditions?

Owner or occupier responsible for poor conditions.

Can schemes be made for non-insured persons?

Yes, for medical facilities with user charges.

Are schemes for gig and unorganised workers allowed?

Yes, with specified conditions.

Can establishments be exempted?

Yes, if they provide similar or better benefits.

Do contributions have priority over other debts?

Yes, they take priority.

Who establishes Insurance Courts?

The State Government.

Judicial officers or experienced legal practitioners.

What disputes are decided by Insurance Court?

All disputes relating to contributions, benefits, and related matters.

Is deposit required before filing?

Yes, 50% of claimed amount, subject to waiver.

Can civil courts decide such matters?

What powers does the Court have?

Powers similar to a civil court.

What is limitation period?

Three years from cause of action.

Only on substantial questions of law.

What is time limit for appeal?

Therefore, the incorporation of the Employees’ State Insurance Corporation into the Code marks a progressive shift towards a more inclusive and adaptable social security regime in India. By retaining core benefits while expanding coverage and modernising administrative mechanisms, the Code strengthens ESIC’s role as a cornerstone of employee welfare. It reflects a move from a limited, sector-based approach to a broader, universal model of social protection, ensuring that evolving forms of employment are also brought within its ambit. Ultimately, the framework seeks to balance employer compliance with employee welfare, reinforcing the vision of comprehensive social security for all workers in India.

Muneeb Rashid Malik is an Advocate. He tweets @muneebmalikrash.

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