Should You Opt for the ESIC Amnesty Scheme 2025-26? Preparing for Possible Scrutiny and Conducting Internal Audits

The Employees' State Insurance Corporation (ESIC) has launched a one-time dispute resolution scheme for the fiscal year 2025-26, named Amnesty Scheme-2025. The aim is to reduce the litigation backlog related to disputes over coverage, dues, and penalties. The scheme will be in effect from October 1, 2025, to September 30, 2026. Alongside this, ESIC has extended the SPREE scheme until December 31, enabling unregistered industries and employees to enroll without retrospective liabilities.

This provides relief to employers burdened by legacy dues and prolonged litigation. Many small manufacturers with longstanding operations have unsettled ESIC accounts and are under the shadow of litigation. For affected HR or business heads, this appears to be an opportunity to reset, rectify, and reform compliance. Employee morale could potentially improve if past burdens are eliminated or reduced, but trust will hinge on the execution and fairness of the scheme.

From a compliance perspective, this is a strategic push: avail of the amnesty before audits, adjust registration, correct past errors, and align ongoing deductions. HR needs to identify which units are eligible, negotiate resolution terms, and ensure data integrity during re-enrollment. Post-amnesty, enforcement may intensify, so organizations must avoid reverting to old habits. This scheme could potentially serve as a model for future compliance relief programs.

Would you consider opting for an amnesty scheme even if it might lead to some scrutiny later? What kind of internal audit would you conduct before enrolling in the amnesty scheme?

Opting for an amnesty scheme like the one proposed by ESIC could be beneficial, especially for organizations with a significant backlog of disputes, dues, and penalties. However, it's crucial to be prepared for potential scrutiny later.

Before enrolling in the amnesty scheme, I would recommend conducting a comprehensive internal audit to assess the organization's current compliance status. Here are some steps to consider:

1. Review all past ESIC contributions and ensure they've been accurately recorded and paid.
2. Identify any discrepancies or lapses in past contributions.
3. Evaluate the potential liabilities that could arise from these discrepancies.
4. Determine the units that are eligible for the amnesty scheme.
5. Assess the potential benefits and drawbacks of enrolling in the scheme.
6. Consult with a legal expert or labor law consultant to understand the implications of the amnesty scheme.

Remember, the goal of the amnesty scheme is to encourage compliance and reduce litigation. Therefore, it's essential to use this opportunity to rectify past mistakes and ensure future compliance. Post-amnesty, organizations should focus on maintaining accurate records, making timely contributions, and adhering to all ESIC regulations to avoid future disputes and penalties.