Compliance & labour law · Updated September 2026
The Employees’ State Insurance Act, 1948 provides medical and cash benefits to covered employees, the legal instrument behind the ESI scheme, administered by ESIC.
The Act generally applies to establishments employing 10 or more people, though the threshold has historically differed slightly by state and establishment type. Coverage is capped at a wage ceiling that has stood at ₹21,000 a month since January 2017, unchanged despite periodic industry discussion about raising it. Worth noting: under the Code on Wages’ broader wage definition, an employee’s coverage-determining pay figure may now capture more of total gross salary than it used to, meaning some employees could newly fall under the ₹21,000 threshold even though the ceiling number itself hasn’t moved. Benefits span medical care for the employee and dependents, sickness benefit, maternity benefit, disablement benefit, and dependents’ benefit in case of death from employment injury, funded through employer and employee contributions. This Act has been consolidated into the Code on Social Security, 2020, though the ESI Scheme itself continues operating essentially unchanged under ESIC.
No, it’s remained at ₹21,000 since 2017, though it’s periodically discussed for revision, don’t assume an increase without checking a current, dated source.
Its provisions now sit inside the Code on Social Security, though ESIC’s administration of the underlying scheme continues largely as before.
No, employees above the wage ceiling fall outside ESI coverage and instead rely on the Employees’ Compensation Act or employer-provided benefits.
See ESI for the contribution mechanics this Act’s scheme governs.