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Labour Laws Central Ministry of Labour and Employment Employees' State Insurance Act, 1948

Change in ESI Compliance Subsequent to Change in Definition of 'Wages' under the Code on Social Security, 2020

13-Dec-2025 | No: 39/Surat/SPREE2025/2025/IC-2

This circular informs employers about the changes in Employees State Insurance (ESI) compliance arising from the redefinition of the term 'wages' following the pan-India implementation of the four Labour Codes, including the Code on Social Security, 2020, with effect from 21 November 2025. It explains the revised statutory definition of 'wages', detailing the components included and excluded, along with the applicable provisos relating to the 50% threshold and valuation of remuneration in kind. In light of these amendments, factories and establishments covered or coverable under ESIC are advised to make necessary changes in record-keeping and contribution calculations to ensure correct compliance with the ESI Scheme. The circular also reminds employers about the ongoing SPREE-2025 scheme, which provides immunity from retrospective liabilities for employees registered during the scheme period ending on 31 December 2025, and encourages timely online registration of all eligible employees. Please refer to the document attached for more information.

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