The Employees' State Insurance Act, 1948

What it does

The Act created a social insurance scheme for employees, run by the Employees' State Insurance Corporation. Employers and employees paid contributions into a fund, and the insured person and, in some cases, dependants received benefits: medical care, sickness benefit, maternity benefit, disablement benefit and dependants' benefit where an employee died of an employment injury.

Disputes about coverage, contributions and benefits went to the Employees' Insurance Court, and the Act barred the ordinary civil courts from deciding the matters it assigned to that court.

The Act is a repealed instrument. The Code on Social Security, 2020 subsumes it, and the labour codes were brought into force on 21 November 2025. The page is therefore about a statute that still matters for earlier periods, and for pending matters, as the Code's repeal and savings provisions allow.

Who it binds

Employers of covered factories and establishments, and their employees within the wage ceiling. In the Act's last years the ceiling stood at INR 21,000 a month, and the employer's contribution was 3.25 per cent of wages and the employee's 0.75 per cent. Coverage turned on the number of persons employed and on whether the premises were a factory or one of the kinds of establishment that the appropriate Government had notified, and the numerical threshold was set by the Act and could be varied by notification. An employer who engaged workers through a contractor could still be the principal employer for contribution purposes.

What moved out of it

Its provisions now sit in the Code on Social Security, 2020, which treats insurance of this kind as one of the schemes it provides for. The central rules under the Code are the Social Security (Central) Rules, 2026, notified on 8 May 2026, which the firm's note on the labour codes records as part of the final rules under all four codes. The employer's practical duties, namely registering, contributing and keeping records, continue, but the source of the duty is the Code and its rules.

What has changed, and when

The Act dates from 1948 and was amended repeatedly, including to widen coverage and to lower the contribution rates in 2019. Its replacement came with the commencement of the labour codes on 21 November 2025. The Code's transitional provisions decide how contributions due for earlier periods, and claims made under the Act, are handled.

What turns on it in practice

The Act is named on the site's page for employment advisory work. The recurring questions are whether an establishment was covered, whether a particular worker was within the wage ceiling, and whether contributions were paid for the right period. A shortfall in contributions for a period before 21 November 2025 is a liability under the Act as the Code preserves it, and an employer reviewing historic compliance in a transaction treats it as a diligence item.

Going forward, an employer should work from the Code and the 2026 rules, and from the firm's note on the cost of the labour codes. The reach of the scheme, and the treatment of fixed-term and contract workers, are the points where the cost to an owner is greatest.