ESIC Mandates Registration Under New Code on Social Security, 2020

The Employees’ State Insurance Corporation (ESIC) has issued a key directive on the nationwide rollout of the Code on Social Security, 2020 (CoSS 2020), effective November 21, 2025. This update consolidates social security laws to deliver enhanced medical and financial protections for employees across sectors.​

Expanded Coverage Under CoSS 2020

All qualifying establishments must now register with ESIC to extend benefits to a broader employee base, including many previously excluded workers. A pivotal change is the redefined “wages” under Section 2(88), encompassing basic pay, dearness allowance, and retaining allowance, while excluding items like bonuses, HRA, overtime, commissions, and employer PF contributions—subject to a 50% threshold on exclusions.

Note: There are units where no. of contributing employees in EPFO is much more than ESIC. Such unit may be identifed and requested for compliance in respect of employees, who may now fall under the ambit of ESIC.​

Employer Compliance Requirements

• All establishments meeting the prescribed criteria must register with the Employees’ State Insurance Corporation (ESIC) immediately.​

• Employers must register eligible employees and ensure timely compliance to enable their workforce to access benefits under the new Code.​

• The new definition of “wage” now includes only Basic Pay, DA, and Retaining Allowances.​

Employee Benefits Under the Revised Code

• The Code aims to provide enhanced medical and financial security benefits to employees covered under ESIC.​

• Eligible employees will receive comprehensive benefits, including medical care and financial support during contingencies.​​

Action Points for Employers

• Review eligibility criteria for ESIC coverage.

• Register the establishment and eligible employees without delay.

• Stay updated with ESIC notifications and comply with statutory deadlines.

Please find attached the notification below:

ESI circular issued by ESI head office regarding definition of wages w.e.f. 21.11.2025.

LetterToEmpl_CoSS2020

Implementation of CoSS, 2020