ESIC Clarifies New Amnesty Scheme 2025: Procedural Ease for Dispute Resolution

The Employees' State Insurance Corporation on March 25, 2026 clarified that seeking court permission for out-of-court settlement under the Amnesty Scheme is procedural and not a mandatory pre-condition for availing scheme benefits.

Key Clarification

The scheme operates as an administrative mechanism to facilitate settlement of disputes. Employers are only required to inform the court and file necessary affidavits for withdrawal of pending matters after settlement.

Field offices have been directed to process settlements in accordance with the scheme and ensure proper filing before courts for closure of cases.

Scheme Overview

The ESIC New Amnesty Scheme 2025, effective from October 1, 2025 to September 30, 2026, is designed to resolve long-pending disputes and prosecutions by allowing settlement through payment of contributions and interest with waiver of damages.

The scheme applies to contribution disputes, appellate matters, court litigations and certain criminal cases under the ESI Act.

Cases Covered

The scheme covers disputes under Sections 45A, 45AA, 75 and 82 related to contributions, as well as criminal matters under Sections 84, 85 and 85A of the ESI Act.

It also includes cases where damages alone are disputed, allowing settlement at a reduced percentage of the determined amount.

Conditions for Relief

For closed units, dues along with interest must be settled while damages may be waived. Running units must produce records and clear contributions with interest to avail benefits.

In cases where records are unavailable, a minimum percentage of assessed contribution is required to be paid for settlement.

Excluded Cases

Cases involving fraud, forgery, criminal conspiracy and voluntary registrations through prescribed forms are excluded from the scheme.

Current Litigation Scenario

Nearly 20,000 litigation cases involving approximately ₹1,700 crore are pending under ESIC. The amnesty scheme aims to reduce this burden by encouraging compliance-based settlements.

Applications for withdrawal have already been initiated across courts, with employers actively opting for resolution under the scheme.

Importance of Compliance

Violations under the ESI Act such as non-payment of contributions, delayed remittance, failure to produce records or submission of incorrect details attract penalties including fines, interest, damages and imprisonment.

The amnesty scheme provides an opportunity for employers to regularise compliance and avoid prolonged litigation and penalties.

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