Revised Wage Definition Brings Salaries Up to ₹42,000 Per Month Under ESI Coverage

The definition of “wages” has been revised under the Social Security Code, significantly expanding the scope of coverage under the Employees’ State Insurance (ESI) scheme. With the change, employees earning total wages of up to ₹42,000 per month will now fall within the ambit of ESI benefits.

 

Under Section 2(88) of the Social Security Code, the definition of wages has been modified to include basic pay, dearness allowance, and retaining allowance, wherever applicable. This revised definition replaces earlier interpretations that excluded certain components of remuneration while determining eligibility for social security benefits.

 

As a result of the updated wage definition, the total monthly wage bracket of up to ₹42,000 will be considered for ESI coverage. This expansion is expected to bring a substantially larger segment of the workforce under the ESI scheme, enabling more employees to access statutory medical care and social security benefits.

 

Officials stated that the revised provision will allow many additional employees to become eligible for ESI benefits, including healthcare services, sickness benefits, maternity benefits, and financial protection in case of employment-related contingencies. The move aligns with the broader objective of the Social Security Code to ensure inclusive and comprehensive social security coverage.

 

The change is being viewed as a major step toward strengthening employee welfare by extending institutional healthcare and insurance support to a wider population. Employers have been advised to review wage structures carefully and ensure compliance with the revised provisions to facilitate seamless coverage of eligible employees under the ESI scheme.