Violation of Statutory Obligation

• Failure to register under ESIC is a direct breach of the Employees’ State Insurance Act.
  
• Registration is mandatory for eligible establishments employing 10 or more persons.
  
• Non-registration is considered concealment of employment liability.
  
• The employer is legally accountable even if unaware of the requirement.
  
• Government may enforce registration retroactively upon discovery.
  

Denial of Employee Benefits

• Employees are deprived of their rightful ESIC medical and cash benefits.
  
• No access to health services, maternity benefits, or injury compensation.
  
• Dependents of employees lose coverage in case of fatal incidents.
  
• This may lead to disputes, grievances, or legal complaints by workers.
  
• Employer may be directed to compensate employees personally.
  

Levy of Contributions with Interest

• ESIC will demand contribution for the past period from the date of eligibility.
  
• Arrears include both employer’s and employee’s share of contributions.
  
• Interest at 12% per annum is imposed on delayed amounts.
  
• Payments must be made even if the employee has left the organization.
  
• Full wage records are used to calculate retrospective liability.
  

Imposition of Damages and Penalties

• In addition to interest, damages up to 25% of the unpaid amount may be charged.
  
• Penalties are assessed under Section 85 of the ESIC Act.
  
• ESIC may initiate recovery proceedings through attachment or legal action.
  
• Penalties apply for each month of non-compliance.
  
• Failure to respond may lead to prosecution or imprisonment.
  

Inspection, Enforcement, and Legal Action

• ESIC may conduct surprise inspections or audits to detect non-registration.
  
• Show cause notices and summons may be issued to the employer.
  
• The establishment may be blacklisted from government tenders.
  
• Directors or proprietors may be held personally liable.
  
• Legal proceedings may result in conviction or fine under the ESIC Act.