The Employees' State Insurance Corporation (ESIC) has rolled out a Special Scheme to Promote Registration of Employers and Employees (SPREE) — a one-time window running from 1 July 2025 to 31 December 2025. This limited-period drive offers businesses a rare chance to start fresh with ESI compliance:
- Register employees without paying past dues or penalties for any non-compliance before 1 July 2025
- Immediately extend health and social security benefits to workers and their families
- Build trust and goodwill while avoiding future penalties, disputes, and reputational risks
This clean-slate initiative places SPREE front and centre for organisations that have delayed ESI registration, turning compliance from an obligation into an opportunity.
The Background of ESI Compliance in India:
Healthcare costs can drain pockets at any stage of life. For employees with modest incomes, even a minor medical emergency can become a financial burden. To protect workers from such hardships, the Employees' State Insurance Act, 1948 (ESI Act) was enacted, offering protection through social security and health insurance benefits for self and family members of eligible employees.
The ESI scheme ensures that employees earning up to ₹21,000 per month (limit subject to upwards revision) receive comprehensive medical care and financial protection through insurance cover during sickness, maternity, disability, or even in the unfortunate event of death during employment. Funded by contributions from both employers and employees, the scheme guarantees that workers and their families are not left vulnerable in times of crisis arising out of medical exigencies.
What Employers Must Know About ESI
- Mandatory Registration: Any factory; or establishment with 20 or more employees (lower in some states) covered under the Act must register and contribute for eligible workers.
- Contribution Structure: Contributions are shared between employer and employee, with the employer being responsible for depositing the total amount. For contract workers, the liability rests with the principal employer in case of contractor's failure. Principal employer, however, remains entitled to recover such amount from the contractor.
- Benefits for Employees: Medical treatment at ESIC hospitals and dispensaries, cash compensation during illness, maternity benefits, disability coverage, dependent support in case of death, and even funeral expenses.
Non-registration not only denies employees their rightful benefits but also exposes employers to heavy penalties and prosecution for ESI non-compliance.
The SPREE Initiative – A One-Time Opportunity for Labour Law Compliance
Recognising gaps in compliance, ESIC has launched a Special Scheme to Promote Registration of Employers and Employees (SPREE) — a limited-time drive from 1st July 2025 to 31st December 2025.
Key Highlights of SPREE:
- Fresh registrants will be treated as covered from the date of registration.
- No requirement to pay contributions or penalties for past non-compliance (prior to 1st July 2025).
Exception: Proceedings already initiated by ESIC before 1st July 2025 will, however, continue.
In short, SPREE gives employers opportunity to acquire a clean slate to regularise ESI compliance in India, while immediately extending health and social security benefits to employees. Therefore, this matches the wonderful proposition of 'Win-Win' situation for both employer and employees.
Why Register Now?
- For Employers: Avoid future penalties, litigation, and reputational risk by aligning with compliance requirements.
- For Employees: Immediate access to quality healthcare and financial protection for eligible employees for themselves and their families.
- For Businesses: Reduced compliance disputes; improved industrial harmony; and stronger trust with the workforce.
The Bigger Picture: Your Legal Risk Management
The ESI Act is not just a compliance requirement — it is one of the earliest and most powerful labour welfare laws in independent India. With SPREE, ESIC is offering employers a final chance to course-correct, not through punishment, but through partnership.
Those who act now will not only protect their businesses from liability but also contribute to building a healthier, fairer, and more secure workplace for India's workforce.
Don't wait until it's too late — SPREE may well be the last golden opportunity for non-compliant establishments before ESIC ramps up its enforcement drive. For comprehensive legal compliance management software in India, platforms like Komrisk ensure you never miss a beat on critical regulatory updates and deadlines.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
