The Employees’ State Insurance Corporation has issued a significant circular dated 27 July 2026, clarifying the applicability of the Code on Social Security, 2020 to educational institutions, medical institutions and other eligible establishments in the State of Maharashtra.
The circular, bearing No. 31/NSI/Edu-Med Institute/2023/Coord., follows a clarification issued by the ESIC Headquarters Office on 24 July 2026. It confirms that after the implementation of the Code on Social Security, 2020 from 21 November 2025, coverage of establishments under the Employees’ State Insurance framework is governed directly by Section 1(4), read with the First Schedule of the Code.
Background of the ESIC Circular
ESIC had earlier issued a circular dated 12 February 2026, informing its field offices that implementation and further action under the Government of Maharashtra Notification dated 30 January 2026 had been kept in abeyance until further orders.
This created uncertainty regarding the ESI applicability of educational institutions, hospitals, medical institutions and other establishments in Maharashtra.
The latest circular now clarifies that no separate notification is required to bring an establishment within the ambit of the ESI Scheme where the establishment already falls within Section 1(4), read with the First Schedule of the Code on Social Security, 2020.
Therefore, the earlier decision to keep the Maharashtra Government notification in abeyance does not prevent the statutory provisions of the Code from applying to eligible establishments.
Which Establishments Are Covered?
The circular states that the provisions of the Code on Social Security, 2020 apply to all “establishments” falling within the definition provided under Section 2(29) of the Code, subject to fulfilment of the statutory conditions prescribed under Section 1(4) and the First Schedule.
The clarification specifically includes:
Educational institutions;
Medical institutions; and
Other establishments satisfying the applicable statutory coverage conditions.
The circular does not create a separate coverage category only for schools, colleges, hospitals or medical centres. Instead, it clarifies that such institutions fall within the wider statutory meaning of an “establishment” wherever the prescribed coverage requirements are fulfilled.
Effective Date of ESIC Coverage
The most important compliance point arising from the circular is the effective date.
ESIC has clarified that the relevant provisions of the Code on Social Security, 2020 apply to eligible establishments in Maharashtra from:
21 November 2025
Affected establishments should therefore not treat 27 July 2026, which is merely the date of the circular, as the commencement date of ESI coverage.
The circular is clarificatory in nature and refers back to the date on which the Code on Social Security, 2020 became effective.
Contribution Liability Under Section 29
The circular further states that liability to pay ESI contributions under Section 29 of the Code on Social Security, 2020 also arises from 21 November 2025, subject to fulfilment of the prescribed statutory conditions.
Educational institutions, hospitals, medical centres and other eligible establishments should therefore review their contribution position from the effective date.
The compliance review should include:
Total number of employees engaged;
Eligibility of employees for ESI coverage;
Employee wage records;
Existing ESIC registration status;
Date from which the applicable statutory conditions were satisfied;
Registration of eligible employees; and
Payment of contributions for the relevant period.
Employers should verify whether all eligible employees were registered with ESIC and whether the applicable employer and employee contributions were correctly calculated and deposited.
Directions Issued to ESIC Field Offices
The ESIC Regional Office has directed all Sub-Regional Offices, Branch Offices, ESIC Hospitals and concerned field functionaries in Maharashtra to ensure strict compliance with the provisions of the Code on Social Security, 2020.
The authorities have been instructed to take necessary action for the coverage of all eligible establishments in accordance with the statutory provisions and the clarification issued by ESIC Headquarters.
Educational institutions, medical institutions and other establishments may consequently face:
ESIC registration and coverage proceedings;
Verification of employee and wage records;
Employee eligibility scrutiny;
Examination of past contribution liability; and
Other compliance-related action by ESIC authorities.
What Employers Should Do Now
Affected establishments should undertake an immediate internal compliance review covering:
Applicability of the definition of “establishment” under the Code;
Satisfaction of the applicable employee threshold and other conditions;
Date from which the statutory conditions were fulfilled;
ESIC registration status of the establishment;
Registration of all eligible employees;
Calculation and deposit of contributions from 21 November 2025; and
Availability of attendance, wage, employee and contribution records.
Where registration or contribution compliance has not been completed, the establishment should carefully examine its legal position before responding to ESIC communications or initiating retrospective compliance.
Key Legal Takeaway
The central message of the circular is that ESI coverage now flows directly from the provisions of the Code on Social Security, 2020.
A separate State Government notification is not required where an establishment is already covered under Section 1(4), read with the First Schedule of the Code.
The circular therefore resolves the earlier uncertainty concerning the Maharashtra notification and confirms that educational institutions, medical institutions and other eligible establishments are required to comply from 21 November 2025, subject to fulfilment of the statutory conditions.
Conclusion
The ESIC circular dated 27 July 2026 has important compliance implications for educational, medical and other establishments across Maharashtra.
Institutions that postponed ESIC registration or contribution compliance because the Maharashtra Government notification was kept in abeyance should now reassess their legal position without delay.
A timely review of coverage, employee eligibility, wage records, registration and contribution liability will help establishments prepare for verification by ESIC authorities and reduce the risk of future compliance disputes.
Important Note: The document issued on 27 July 2026 is an ESIC departmental circular and not a Gazette Notification. It records the official administrative clarification regarding the applicability and implementation of ESI coverage under the Code on Social Security, 2020.