How Does the ESIC Inspection Procedure Impact Society

How Does the ESIC Inspection Procedure Impact Society


Employees State Insurance Corporation (ESIC) is a multidimensional governmental system crafted to provide Indian workers the much-needed socio-economic protection. ESI scheme aims at providing a range of benefits to the Indian working population. ESIC inspection warrants employee benefits and labor law compliance, thus positively impacting society.

The Fundamentals of the ESIC Inspection Process

Falling under the Ministry of Labor and Employment, the Government of India, ESIC has been formulated to provide the working class with financial assistance during medical emergencies, considered one of the key employee benefits.

ESI inspection provisions, therefore, focus on furthering the objective of labor welfare. Inspection helps to detect concealed employment. Physical visits and inspection of the premises and verification of the ledgers and relevant books enable the authorities to ensure that all eligible employees are covered under the scheme in a business establishment. Moreover, it facilitates verifying whether business owners pay the required ESI contribution on all elements of salaries or wages.

The Evolution of the ESIC Inspection Process

ESI inspections were earlier conducted in a random manner; business establishments were chosen and visited independently by the authority. Over the years, the inspection process has been well structured and organized. The responsibility of inspection is with the social security officer, who is required to inform an establishment about the inspection plan, period, and the documents expected to be checked.

Today, proper and periodical inspections are conducted, safeguarding the interests of the working community by ensuring compliance and coverage. Unlike before, when there was no limiting period for inspection, there is a 5-year limitation period for inspecting every business organization in India. This helps to ensure that companies adhere to labor law compliance.

Key Benefits of ESI Scheme and ESIC Inspection 

The ESI scheme takes care of employees’ health and wellness issues. This scheme covers workers’ health care expenses of employees. It comes to their assistance when sickness, disablement, or death, thus relieving them and their families from financial distress during such situations. To ensure that employees are indeed protected with medical care at the time of need, ESCI inspection is crucial. Inspection warrants statutory compliance.

The following are the major items covered by ESI:

  • Comprehensive medical care
  • Compensation related to wage loss
  • Coverage for family members
  • Monetary as well as non-cash benefits

The major categories under which ESI benefits fall are listed below:

  • Medical benefits
  • Disability benefits
  • Sickness benefits
  • Maternity benefits
  • Unemployment allowance
  • Dependent’s benefits

The ESCI Inspection Approach

The rules related to the ESCI inspection process are being updated periodically by the Government of India, in line with the changing business environment. The two major parts of the inspection are described below briefly:

    • Part 1Checking compliance related to regular employees of an organization, ESI authority is required to scrutinize salary registers and verify whether the amounts deducted from employees have been remitted in due time to the ESCI. The values are tallied with the challan vales in this regard.
    • Part 2Verification of various heads of expenses

The authority has to select expenditures of a business establishment related to labor expenses. Such accounting entries must be validated with the appropriate forms.

The Role of HR Service Companies in Ensuring Compliance

Every business organization in India is entrusted with the statutory responsibility of providing essential benefits to the working class, which is crucial for social welfare. To meet statutory compliance and labor law compliance, companies must identify and cover employees under the provisions of ESI.

Under the provisions of law, businesses need to extend the benefit provisions to their employees in time. Here is where professional HR services help companies meet statutory compliance needs while ensuring all employee benefits are passed on to the employees.

Read more: ESIC on Medical Care Benefits during the Covid-19 Pandemic


Offering several cash as well as medical benefits, the ESI scheme helps industrial workers and employees in case of medical needs. ESI provides various employee benefits, and it is also one of the key payroll compliances in India.

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