The Appropriate Government, may grant or renew exemption under section 87 of the ESI Act in respect of a Factory/Establishment or class of factories or establishments in any specified area from the operation of the Act for a period not exceeding one year at a time.

Exemption Under section 88 of the Act is granted by the Appropriate Government to employees, or class of employees, who remain away from their Hqrs. for more than 7 months in a year, and those employees who are posted in non-implemented areas

Exemption under Section 90 can be granted to a Factory/Establishment belonging to any local authority such as municipality/Corporation, etc. if employees in any such factory/Establishment are otherwise in receipt of benefits substantially similar or superior to the benefits provided under the Act.

Policy of the corporation in grating exemption under Section 87 to 90 and 91A of the Act Principles to be followed in granting exemption came up for discussion in the meeting of corporation and a Sub-Committee consisting of representatives of Employers, Employees, Medical Profession, State Govt. and Parliament was constituted to examine the matter in detail. The Sub-Committee was, therefore, not in favour of granting exemption from the Act at all to any factory or establishment. Nevertheless, the committee recommended that if in any rare case, exemption is to be granted or renewed on compelling administrative exigencies, the only guideline of benefits provide by the employers and lot because of any other reasons.