ESI (GENERAL) REGULATIONS, 2026
A Practical Guide to the Draft Framework and Key Compliance
Changes
By Rahul Kunwar
| ClickNexi Global Compliance
Community
|
IMPORTANT: These are Draft Regulations, 2026 — not the final
regulations. The draft invites objections and suggestions before
finalisation. |
The Employees’ State Insurance framework is set for a
significant regulatory transition following the enactment of the Code on Social
Security, 2020. The Employees’ State Insurance Corporation (ESIC) has published
the draft Employees’ State Insurance (General) Regulations, 2026, proposing a
new regulatory framework in place of the existing ESI (General) Regulations,
1950.
1. Why the Draft ESI Regulations Matter
The proposed 2026 Regulations seek to align the procedural
framework with the Code on Social Security, 2020. The draft proposes the
Employees’ State Insurance (General) Regulations, 2026 and states that they
will extend to the whole of India.
For HR, Payroll, Compliance, IR and Legal teams, this
creates a need to review ESI registration, employee onboarding documentation,
family-detail management, monthly contribution filings, contribution payment
timelines, employee registers, contractor records, benefit-claim documentation,
medical certification, accident reporting and digital compliance processes.
2. Contribution and Benefit Periods
The draft provides the following contribution and
corresponding benefit periods:
3. Employee Registration and Declaration
The draft places considerable emphasis on employee-level
registration. Employers would be required to obtain the necessary particulars
from employees for registration, including details relating to the employee and
family. The declaration framework applies both to persons employed on the
notified date and persons appointed thereafter.
4. Digital Insured Person Card
After registration on the specified portal, the employer
would generate the Insured Person Card electronically, containing details of
the insured person and family members. This reflects the broader digital
orientation of the proposed regulations.
5. Family Details Must Be Kept Updated
The insured person is required to communicate changes in
family membership to the employer, and the employer is required to ensure that
such changes are incorporated into the registration details on the specified
portal.
6. Monthly Contribution Return
Under Regulation 16, employers would submit the monthly
contribution return through the specified portal in Form 2 for employees
employed directly or through contractors for whom contributions are payable.
The monthly return is proposed to be filed within 15 days from the end of the
month. The draft additionally provides that all monthly returns relating to a
contribution period must be filed within 45 days from the end of that
contribution period. In the event of permanent closure, returns are proposed to
be filed within 15 days of permanent closure.
7. Contribution Payment Timeline
Regulation 19 proposes that the employer responsible for
contribution payment must pay the contribution within 15 days from the last day
of the calendar month in which the contribution becomes due. For an
establishment that permanently closes, all contributions are proposed to be
paid within 15 days from the date of permanent closure.
8. Interest on Delayed Contribution
An employer failing to pay contributions within the
prescribed period would be liable to pay simple interest for every day of
default or delay, at the rate notified by the Central Government. Such interest
would be recoverable as arrears of land revenue.
9. Proposed Penalty Framework
Regulation 22 provides that ESIC may impose a penalty at 1%
of the amount due for every month of delay, subject to Section 128 of the Code
and the conditions that may be specified by the Central Government. The penalty
would be recoverable as arrears of land revenue.
10. Employee Registers and Contractor Records
The draft proposes maintenance of an Employee Register in
Form 4 by every employer. The register may be maintained electronically or
otherwise, and the draft specifically provides for a register concerning
employees engaged by contractors. The contractor’s employee register is
required to be maintained and made available to the employer before settlement
of amounts payable under the relevant provision. The draft also proposes
preservation of the register for five years from the date of the last entry.
11. Nomination as an Employee Data Control
The draft contains provisions concerning nomination and
requires nomination data to be handled in accordance with the prescribed
framework. Where an employee has a family, nomination is required to be in
favour of one or more family members. If an employee subsequently acquires a
family, an earlier nomination in favour of a non-family member becomes invalid
and a fresh nomination is required.
12. Maternity Benefit Procedures
The draft contains detailed procedural provisions relating
to maternity benefits, including pregnancy, confinement, miscarriage, illness
arising out of pregnancy or confinement, commissioning mothers and legally
adoptive mothers.
13. Adoption and Commissioning Mother Provisions
The proposed framework specifically addresses maternity
benefit claims by a commissioning mother and by an insured woman legally
adopting a child up to three months of age, subject to prescribed supporting
documentation and conditions.
14. Medical Benefits
The proposed regulations provide a framework for medical
treatment of insured persons and their families through ESIC or State
Government facilities and, in specified circumstances, through other medical
institutions subject to prescribed conditions and procedures.
15. Retirement and Post-Retirement Medical Benefit
The draft provides for continued medical benefits for
certain insured persons and spouses after superannuation, voluntary retirement
or qualifying premature retirement, subject to prescribed conditions. It
proposes an advance contribution of ₹50 per month for one year for this
purpose, subject to the regulation.
16. Employment Injury and Accident Reporting
The draft contains provisions concerning employment
injuries, including accident reporting, accident books, accident reports,
primary medical arrangements, additional information, medical board
examination, occupational diseases, permanent disablement, death resulting from
employment injury and dependants’ benefits.
17. Inspection and Record Maintenance
The proposed Regulations provide for an inspection book to
be maintained by employers and produced when required by the
Inspector-cum-Facilitator or an authorised officer. The employer is proposed to
preserve the inspection book for five years from the date of the last entry.
18. Digital Compliance Is the Direction
Where an online system is implemented, processes such as
establishment registration, employee registration, contribution deposits,
challan generation, contribution payment, benefit claims and processing of
claims would be undertaken online, including digital signatures where required.
|
Contribution
Period |
Corresponding
Benefit Period |
|
1 April – 30 September |
1 January – 30 June of the following year |
|
1 October – 31 March |
1 July – 31 December |
For a person becoming an employee for the first time under
the Code, the first contribution period would begin from the date of employment
in the ongoing contribution period, while the corresponding benefit period
would begin after completion of nine months from the date of employment.
19. What Employers Should Do Now
·
Employee Master Data — validate employee
details, insurance numbers, family particulars and duplicate or incorrect
records.
·
Payroll — validate ESI wage calculations and
reconcile payroll with ESI returns.
·
Monthly Compliance — establish an internal
deadline before the statutory deadline and maintain payment evidence.
·
Contractor Compliance — obtain contractor
employee data and reconcile deployed manpower with ESI records.
·
Employee Documentation — maintain declarations,
nominations, family updates, Insured Person Card and benefit-related documents.
·
Accident Compliance — maintain accident
reporting, accident book, employment-injury documentation and HR/EHS
coordination.
·
Records — maintain employee registers,
contractor records, inspection book, contribution records and claim
documentation.
·
Digital Controls — control portal access,
authorised users, digital signatures, data validation and audit trails.
20. Consultation Process: An Opportunity for Stakeholders
The notification expressly provides an opportunity for
affected persons to submit objections and suggestions. It specifies that
comments may be sent to the Insurance Commissioner, ESIC, Panchdeep Bhawan, New
Delhi, or through the email address specified in the notification. The proposed
format requires identification of the person or organisation, the relevant
chapter and regulation, the proposed revised provision and the reasons for the
proposed change.
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CLICKNEXI COMPLIANCE PERSPECTIVE |
Conclusion
The Draft Employees’ State Insurance (General) Regulations,
2026 represent an important procedural transition accompanying the
implementation of the Social Security Code, 2020. For employers, the proposed
framework extends beyond monthly contribution payment and covers employee
registration, family data, nomination, payroll, monthly returns, contractor
compliance, accident reporting, benefit claims, medical benefits, records,
inspection and digital processes.
Since the document is still a draft, organisations should
distinguish between current statutory requirements and proposed requirements
under the 2026 Regulations and monitor the final notification before
implementing any provision as a final legal requirement.
Source: Draft Employees’ State Insurance (General) Regulations, 2026, Gazette of India, Part III, Section 4. Uploaded Gazette copy dated July 2026.
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