After minimum wage revision, Karnataka pushes Centre for change in ESI ceiling

With the revised minimum wages notified on Saturday and with an average hike of about 60%, the Karnataka government is pushing the Centre to revise the ESI ceiling from the current ₹21,000 a month to ₹30,000 a month.

This is because a large part of the workforce, now covered under the ESI facility, will be out of the ESI cover for medical benefits as they would breach the ₹21,000 a month ceiling with the revised minimum wages.

“We have written to the Centre to revise the ceiling twice. We have also written to the Members of Parliament to revise the ceiling,” Labour Minister Santhosh Lad told The Hindu. He said that the State government would pursue the matter with the Centre.

The revision of minimum wages, mandated at least once in five years in the Minimum Wages Act 1948, was finally done on Saturday. It had been hanging since 2022-2023 as the unions had opposed the marginal increase of 5% to 10% notified then for 34 scheduled employments. The unions had demanded the wage calculation to be done as per the Supreme Court guidelines, and the Karnataka High Court had also upheld the demand. As many as four cases had been filed in the High Court against the fresh draft that was notified in April, 2025.

The State government had also delayed notifying the final wages owing to the implementation of four industrial code, and arguments had been made against the minimum wage revision citing the provisions in Code of Wages. However, the unions had cited other provisions under the same Code to bring pressure on the government to notify the wages.

Despite the Code on Wages coming into effect in November 2025, the final notification has been issued under the Minimum Wages Act, 1948, as the code allows the completion of the previous notifications done under the Act. The final notification cites General Clauses Act, 1897, and Section 69 (2) of the Code on Wages, 2019, to enable it to notify the revised wages under the Minimum Wages Act.

The All India Trade Union Congress (AITUC), which waged a legal battle against the earlier notifications in 2022-2023, welcomed the government’s decision. “The revision has been long-pending and includes several positive and progressive measures such as the uniform common notification across different scheduled employments, inclusion of balanced diet for food costs and special consideration for the arduous nature of certain employments such as sanitation work, foundries and power plants,” said AITUC general secretary D.A. Vijaybhaskar.