Business

India — Business: Hiring Employees

Under the new Labour Codes, ESI (Employees' State Insurance) coverage has been expanded to all geographic areas of India and now extends to contract workers, fixed-term employees, and in some cases gig/platform workers. The Social Security (Central) Rules, 2026 (notified 8 May 2026) require employers to complete ESI portal registration on or before a new employee's first day of joining — not merely 'before employment' as previously interpreted — and to maintain system-generated logs proving the registration timestamp for ESIC inspection purposes. EPF (Employee Provident Fund) contribution rates remain unchanged at 12% employer + 12% employee.

Code on Social Security, 2020 / Social Security (Central) Rules, 2026 · Last verified 2026-07-20

Key Facts

  • ESI coverage now applies nationwide (all geographic areas) and extends to contract, fixed-term, and some gig/platform workers under the new Labour Codes.
  • Since the Social Security (Central) Rules, 2026, ESI portal registration must be completed on or before the employee's first day of joining, not merely 'before employment.'
  • Employers must maintain system-generated logs proving the exact date/time of ESIC registration for each new hire, as first-line evidence during ESIC inspections.
  • EPF contribution rates remain unchanged: 12% employer + 12% employee.

Required Documents

  • Employment contract
  • ESIC registration confirmation (dated employee's first day or earlier)
  • PF/UAN details for the employee

Common Mistakes

  • Registering a new hire on ESI any time 'before employment starts' rather than strictly by their first day, which is now a compliance violation under the 2026 rules.
  • Failing to maintain system-generated ESIC registration timestamp logs, weakening the employer's position during an ESIC inspection.

Related Topics

social-securitypayroll
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