General rule on liability waiver

• ESIC liabilities, including contributions, interest, and damages, are generally statutory in nature and not subject to waiver.
  
• The ESIC Act mandates strict compliance, and non-payment or delay automatically attracts interest and penal damages.
  
• However, under specific circumstances, partial or conditional relief may be granted on damages, but not on contributions or interest.
  
• Any waiver must follow the procedures and limits prescribed under the law.
  
• Employers must apply formally with justifiable reasons to the competent authority.
  

Waiver of damages (penalty portion)

• The ESIC authority has the discretion to reduce or waive the penal damages, depending on the merit of the case.
  
• Requests are considered when there is no willful default, and the delay occurred due to genuine hardship or unavoidable circumstances.
  
• Waiver is typically considered for sick industrial companies, closed units, or disaster-affected firms.
  
• The employer must submit a written application for waiver with supporting documents and a statement of facts.
  
• Approval, if granted, comes from the Regional Director or higher ESIC authorities based on internal assessment.
  

Contributions and interest cannot be waived

• Employee and employer contributions are mandatory and cannot be waived under any condition.
  
• Interest at 12% per annum is also a statutory charge and must be paid in full, regardless of the reason for default.
  
• The law treats contributions as a priority liability, and recovery can be enforced through legal action.
  
• Delay in payment does not release the employer from liability even if the business has suffered a loss.
  
• All contributions must be paid first before any consideration for damage waiver is processed.
  

Procedure to request waiver of damages

• Submit a detailed application to the Regional ESIC Office explaining the delay and financial status.
  
• Attach relevant records such as financial statements, closure notices, disaster reports, or court orders.
  
• Include a request for personal hearing, if necessary, to explain the circumstances.
  
• The authority will examine the records, intent, and history of compliance before taking a decision.
  
• The final decision on waiver is communicated formally and is binding.
  

Post-waiver compliance expectations

• Employers receiving relief must ensure strict future compliance with ESIC provisions.
  
• Repeat defaults may disqualify them from future waivers or concessions.
  
• Proper documentation and communication with ESIC offices are essential.
  
• Maintaining regular contribution filing and employee record accuracy helps prevent penalties.
  
• Waivers, if granted, are typically one-time reliefs and not applicable across all defaults.