Introduction
On 27 July 2026, the Employees’ State Insurance Corporation’s Regional Office, Mumbai issued a circular that ends months of uncertainty over whether schools, colleges, hospitals and similar establishments in Maharashtra fall under the ESI net. The answer, ESIC has now confirmed, is yes — and it has applied since 21 November 2025, not from the date of this circular.
This is a compliance-relevant clarification, not a new law. It doesn’t create a fresh category of coverage for educational or medical institutions — it confirms that such institutions were always “establishments” under the Code on Social Security, 2020, and that their coverage doesn’t depend on a separate state government notification.
Background — Why This Circular Was Needed
The confusion traces back to a Maharashtra Government Notification dated 30 January 2026, which was meant to extend ESI coverage to educational and medical institutions in the state. Before it could take effect, ESIC’s Regional Office issued a circular on 12 February 2026 instructing field offices to keep implementation and further action under that notification in abeyance until further orders — on the directions of the State Government.
That abeyance order left employers, particularly schools, colleges and hospitals, unsure whether they were required to register and contribute at all.
ESIC Headquarters resolved this with a letter dated 24 July 2026, and the Mumbai Regional Office circulated that clarification on 27 July 2026.
The Key Clarification
The circular makes one central legal point: coverage under ESI no longer depends on a separate state notification.
Since the Code on Social Security, 2020 came into force on 21 November 2025, coverage of establishments is governed directly by Section 1(4), read with the First Schedule of the Code. If an establishment meets the conditions set out there, it is covered — automatically, by operation of the Code itself.
This means the Maharashtra notification’s abeyance is now legally beside the point. Educational institutions, medical institutions and other establishments don’t need that notification to be covered; they were already brought in by the Code.
Which Establishments Does This Cover?
The circular applies the Code’s general definition of “establishment” under Section 2(29), subject to the conditions in Section 1(4) and the First Schedule. It explicitly names:
- Educational institutions — schools, colleges, coaching institutes, and similar bodies
- Medical institutions — hospitals, nursing homes, diagnostic and medical centres
- Other establishments meeting the statutory coverage conditions
There’s no separate, narrower test for these institutions — they’re covered wherever they satisfy the same threshold and conditions that apply to any other establishment under the Code.
Effective Date — Don’t Confuse the Circular Date With the Coverage Date
This is the point most likely to trip up employers. The circular is dated 27 July 2026 — but that is only the date of the clarification. The actual coverage obligation has applied since 21 November 2025, the date the Code on Social Security itself came into force.
Institutions that assumed they had no ESI liability during the abeyance period should treat that assumption as incorrect. The Code’s coverage was never actually suspended — only the state notification’s implementation was paused.
Contribution Liability From 21 November 2025
The circular is explicit that liability to pay contributions under Section 29 of the Code also runs from 21 November 2025, subject to the same statutory conditions being met.
For affected institutions, this raises a retrospective compliance question covering roughly the past eight months:
- Were all eligible employees identified and registered with ESIC?
- Were employer and employee contributions (4% combined — 3.25% employer, 0.75% employee) correctly computed and deposited from 21 November 2025?
- Is there a documented basis for wage records and eligibility determinations covering this period?
What ESIC Field Offices Have Been Directed to Do
The circular directs all Sub-Regional Offices, Branch Offices, ESIC Hospitals and other field functionaries in Maharashtra to ensure strict compliance and to take necessary action for coverage of all eligible establishments. In practical terms, this means institutions that haven’t registered or contributed can expect:
- ESIC registration and coverage proceedings
- Verification of employee and wage records
- Scrutiny of employee eligibility
- Examination of past (retrospective) contribution liability
Compliance Action Checklist for Educational and Medical Institutions
Immediate review:
- Confirm whether the institution meets the “establishment” definition and threshold conditions under Section 1(4) and the First Schedule
- Identify the date from which those conditions were actually satisfied (this may or may not be 21 November 2025, depending on employee count and other factors)
- Check current ESIC registration status
- Identify all employees eligible for ESI coverage based on wages
Retrospective compliance: 5. Calculate contribution liability under Section 29 from the applicable effective date 6. Reconcile wage, attendance and contribution records for the period 7. Register any employees who should have been covered but weren’t
Before responding to ESIC: 8. Where registration or contributions are pending, assess the legal position carefully — including any grounds specific to the institution — before responding to ESIC communications or beginning retrospective payments on your own
Frequently Asked Questions
From what date does ESIC coverage apply to educational and medical institutions in Maharashtra? From 21 November 2025 — the date the Code on Social Security, 2020 came into force — not from 27 July 2026, the date of this clarifying circular.
Is a separate Maharashtra Government notification still required for ESI coverage? No. The circular clarifies that coverage flows directly from Section 1(4) read with the First Schedule of the Code on Social Security, 2020. No separate state notification is needed.
Does the abeyance of the Maharashtra notification dated 30 January 2026 mean institutions have no ESI liability? No. The abeyance only paused implementation of that specific state notification. It does not prevent the Code’s own statutory provisions from applying.
Are schools and colleges treated differently from other establishments under this circular? No. They are covered under the same general “establishment” definition (Section 2(29)) and the same conditions under Section 1(4) and the First Schedule as any other establishment.
What should an institution do if it hasn’t registered with ESIC yet? Review eligibility and the effective date of coverage, reconcile employee and wage records, and assess retrospective contribution liability from 21 November 2025 before responding to any ESIC communication.
Is this circular a Gazette Notification? No. ESIC has specifically noted that this is a departmental circular recording an administrative clarification — not a Gazette Notification.
Conclusion
This circular doesn’t change the law — it removes an administrative ambiguity that had let some Maharashtra institutions treat ESI compliance as paused. With ESIC field offices now directed to act on coverage, educational and medical institutions that deferred registration or contributions because of the abeyance order should reassess their position without delay, with particular attention to the retrospective liability window running back to 21 November 2025.
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