The Ministry of Labour and Employment has introduced the Other Beneficiaries and Members of their Families Medical Facilities Scheme, 2026 through Notification S.O. 2355(E) dated 8 May 2026. Issued under Section 44 of the Code on Social Security, 2020, the Scheme came into effect from the date of its publication in the Official Gazette.

The initiative marks a significant step towards maximizing the utilization of Employees’ State Insurance Corporation (ESIC) healthcare infrastructure while expanding access to quality medical services for beneficiaries covered under various Central Government welfare schemes.

Background

The Employees’ State Insurance Corporation operates an extensive network of hospitals, dispensaries, and medical institutions across India. While these facilities were established primarily to serve insured persons under the ESI Scheme, several hospitals in different regions continue to have spare capacity and remain under-utilized.

Recognizing this opportunity, the Government has launched the Medical Facilities Scheme, 2026, enabling eligible beneficiaries from other Central Government schemes and their family members to access treatment at selected ESIC hospitals. The move is expected to improve healthcare accessibility while ensuring optimal use of public healthcare infrastructure.

Applicability of the Scheme

The Scheme applies to:

• Other beneficiaries registered under schemes framed by the Central Government.
• Members of their families who meet the prescribed eligibility criteria.

Importantly, the Scheme is not intended for regular insured persons already covered under the Employees’ State Insurance Scheme. Instead, it creates a separate framework allowing additional categories of beneficiaries to avail healthcare services at designated ESIC facilities.

Registration Process

To receive medical treatment under the Scheme, beneficiaries must complete a registration process.

Applicants are required to:

• Submit the prescribed registration form electronically or through any other approved mode.
• Provide details of themselves and eligible family members.
• Produce a valid identity card issued by ESIC or any other applicable Central Government scheme.

The registration mechanism helps ensure that only eligible individuals and their dependents can access benefits under the Scheme.

Medical Benefits Available

Registered beneficiaries will be entitled to receive medical treatment and attendance from identified under-utilized ESIC hospitals.

The provision serves multiple objectives:

• Enhances healthcare access for beneficiaries of other government schemes.
• Improves utilization of ESIC medical infrastructure.
• Reduces pressure on other public healthcare institutions.
• Expands the reach of social security-linked healthcare services.

By leveraging existing infrastructure, the Government aims to create a more efficient and inclusive healthcare delivery system.

User Charges and Financial Provisions

Unlike regular ESIC medical benefits, beneficiaries under this Scheme will be required to pay user charges.

The rates will be notified by the Employees’ State Insurance Corporation in consultation with the Central Government.

A noteworthy feature of the Scheme is that the user charges collected will be treated as contributions and credited to the Employees’ State Insurance Fund. This ensures financial sustainability while enabling wider access to ESIC healthcare facilities.

Record-Keeping and Compliance Requirements

The Scheme places a strong emphasis on transparency and accountability.

ESIC hospitals providing treatment under the Scheme must:

• Maintain separate electronic registers for beneficiaries covered under the Scheme.
• Keep distinct treatment records.
• Record and track all user charges collected.
• Ensure proper segregation of records from those maintained for regular ESIC beneficiaries.

These compliance measures support effective monitoring, audit readiness, and efficient administration of the Scheme.

Key Implications for Employers and Compliance Professionals

Employers should understand that this Scheme does not alter existing ESIC compliance obligations applicable to eligible employees under the ESI framework or the Code on Social Security, 2020.

Key points include:

• Regular ESIC registration and contribution requirements remain unchanged.
• The Scheme is separate from the standard ESIC coverage available to insured employees.
• It primarily focuses on extending healthcare services to beneficiaries of other Central Government schemes.
• It reflects the Government’s broader objective of expanding social security benefits through existing healthcare infrastructure.

For HR professionals, payroll managers, and labour law compliance practitioners, it is important to distinguish between regular ESIC coverage and benefits available under this newly introduced Scheme.

Benefits of the Scheme

The Medical Facilities Scheme, 2026 offers several advantages:

Better Utilization of Existing Infrastructure

Under-utilized ESIC hospitals can now serve a wider beneficiary base, improving efficiency and public resource utilization.

Expanded Healthcare Access

Beneficiaries of various Central Government schemes gain access to established medical facilities and specialized healthcare services.

Financial Sustainability

The user charge model supports the ESIC Fund while allowing beneficiaries to access quality medical care.

Strengthened Social Security Framework

The Scheme aligns with the Government’s vision of broadening social security coverage and healthcare accessibility across India.

Conclusion

The Other Beneficiaries and Members of their Families Medical Facilities Scheme, 2026 represents a progressive policy initiative aimed at expanding healthcare access while ensuring optimum utilization of ESIC medical infrastructure.

By allowing registered beneficiaries under other Central Government schemes to avail treatment from under-utilized ESIC hospitals, the Government has created a balanced framework that combines accessibility, accountability, and financial sustainability. While the Scheme does not impact existing employer obligations under ESIC, it reflects a broader commitment to strengthening India’s social security and healthcare ecosystem.

As the implementation progresses, the Scheme is expected to play an important role in extending quality healthcare services to a larger section of society while maximizing the value of public healthcare investments.

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India entered a historic phase of labour law reform with the implementation of the Four Labour Codes effective 21 November 2025, marking the most significant transformation of employment regulations since Independence.
These Codes consolidate 29 existing central labour laws into four simplified legislations, aiming to modernise compliance, enhance worker protection, and improve ease of doing business.

What Are the Four Labour Codes?

The Government introduced four consolidated Codes to rationalise fragmented labour legislation:

1. Code on Wages, 2019

2. Industrial Relations Code, 2020

3. Code on Social Security, 2020

4. Occupational Safety, Health and Working Conditions (OSH) Code, 2020

These Codes aim to create a uniform legal framework governing wages, industrial relations, social security, and workplace safety across sectors.

Why Were the Labour Codes Introduced?

The earlier system consisted of multiple overlapping laws, complex definitions, and varied compliance requirements. The reform seeks to:

• Simplify and rationalise labour regulations by merging 29 laws.

• Reduce multiplicity of definitions and authorities, bringing transparency and accountability.

• Improve ease of doing business while protecting worker welfare.

• Create universal social security coverage, including for unorganised, gig, and platform workers.

The reforms are described as a structural reset intended to align labour regulation with evolving economic realities and new forms of employment.

Key Features of the Four Labour Codes

1. Universalisation of Wages and Timely Payment

The Codes ensure minimum and timely wage payments and aim to extend wage protection nationwide.

2. Expanded Social Security Net

For the first time, social security provisions extend to gig workers, platform workers, and unorganised labour.

3. Focus on Worker Welfare and Safety

The OSH Code mandates improved workplace safety standards and welfare provisions across industries.

4. Formalisation of Employment Practices

Mandatory appointment letters, safety norms, and structured employment conditions aim to bring greater formalisation.

5. Reskilling and Industrial Harmony

The Industrial Relations Code introduces mechanisms such as reskilling funds for retrenched workers and updated dispute-resolution systems.

Implementation Status: “In Force” but Transitional

Although the Codes legally came into effect on 21 November 2025, their full implementation depends heavily on state-level rules and operational frameworks.

• The Codes are formally notified and in force nationwide.

• However, detailed state rules are still being issued, resulting in a phased transition.

• Until new rules are finalised, earlier rules under repealed laws continue to apply where not inconsistent with the Codes.

• Employers are advised to continue compliance under existing frameworks while preparing for change.

This makes the current phase one of legal enforcement with gradual operational rollout.

Impact on Employers

For businesses, especially MSMEs and large establishments, the Codes promise:

• Streamlined compliance through unified registration, licensing, and returns.

• Reduced regulatory burden and simplified governance.

• Greater clarity in wage structures, working conditions, and industrial relations.

However, organisations must prepare for system changes, HR restructuring, and policy alignment once state rules crystallise.

Impact on Employees and Workforce

The Codes aim to expand protection and formal benefits to a broader workforce:

• Nationwide minimum wage coverage and improved wage security.

• Social security access for previously uncovered workers, including gig economy participants.

• Enhanced workplace safety and welfare provisions.

At the same time, debates continue over how the reforms balance flexibility for employers with worker protections, with unions raising concerns and organising protests.

A Landmark Reform with Ongoing Debate

The rollout represents the largest overhaul of India’s labour framework, intended to modernise regulation and support economic growth.
Yet, experts note that the real success will depend on effective implementation by states and adaptation by industry.

What Should Organisations Do Now?

During this transition phase, employers and HR leaders should:

✔ Monitor state-specific notifications and rules.
✔ Conduct internal audits of wage structures, contracts, and compliance systems.
✔ Prepare for digital compliance, unified registers, and policy harmonisation.
✔ Avoid premature restructuring until detailed rules are finalised.

Conclusion

The enforcement of the Four Labour Codes from 21 November 2025 marks a transformative shift from a fragmented legal regime to a consolidated, future-ready labour framework. By integrating worker welfare, social security expansion, and simplified compliance, the Codes aim to balance economic growth with labour protection in a rapidly evolving employment landscape.

The coming years will be critical as India transitions from legislative reform to ground-level execution, making preparedness essential for both employers and employees.

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Here are practical tips every employer and employee should follow to ensure UAN and KYC remain updated at all times.

Why UAN & KYC Updates Are Important

Properly updated UAN and KYC help in:

• Faster PF withdrawals and transfers
• Smooth pension processing
• Avoiding claim rejections
• Easy online verification through EPFO portal
• Compliance with labour and payroll requirements
• Reducing employee grievances

1. Link Aadhaar with UAN

Aadhaar linking is one of the most important KYC requirements under EPFO.

Ensure:

• Name in Aadhaar matches PF records exactly
• Date of birth is correct
• Mobile number linked with Aadhaar is active

Mismatch in basic details can lead to:

• KYC rejection
• UAN authentication failure
• Delays in claims and exits

2. Update PAN Details Correctly

PAN is mandatory especially for:

• Higher PF withdrawals
• Income tax compliance
• Avoiding higher TDS deductions

Common mistakes to avoid:

• Incorrect PAN number entry
• Name mismatch between PAN and UAN
• Using inactive PAN

3. Keep Bank Account Details Active

Employees should regularly verify:

• Bank account number
• IFSC code
• Account status

Closed or inactive accounts often result in failed PF settlements.

Best Practice:

Use salary-linked bank accounts wherever possible.

4. Verify KYC Approval Status Regularly

Many employees upload KYC but forget to check approval status.

HR teams should:

• Conduct monthly verification checks
• Ensure Aadhaar, PAN, and bank details show “Verified” status
• Resolve pending approvals immediately

5. Maintain Accurate Employee Records

Small spelling errors in:

• Employee name
• Father’s name
• Date of joining
• Date of birth

can create major compliance and claim issues later.

Employers should:

• Match records with official documents during onboarding
• Avoid manual data entry mistakes
• Keep digital copies of all documents

6. Conduct Periodic Internal Audits

Companies should perform quarterly audits for:

• Missing KYC
• Inactive UANs
• Duplicate UANs
• Pending exits
• Unseeded Aadhaar records

This helps avoid compliance notices and operational delays.

7. Educate Employees About UAN Importance

Many employees are unaware that:

• Multiple UANs can create issues
• Incorrect KYC can block PF transfers
• Mobile numbers must remain updated

Regular awareness sessions by HR can reduce future problems significantly.

8. Use Unified Payroll & Compliance Support

Integrated payroll and compliance management systems help:

• Reduce manual errors
• Track KYC completion status
• Generate compliance reports
• Ensure timely updates

Professional compliance support also helps organizations stay ready for inspections and audits.

Final Thoughts

Keeping UAN and KYC updated is not just an administrative task — it is a critical compliance responsibility. A proactive approach can save employers from operational delays, employee dissatisfaction, and legal complications.

Whether you are a startup or an established organization, regular monitoring of employee PF records should be part of your compliance process.

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• PF & ESIC Compliance
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The Provident Fund (PF) is one of the most important social security schemes in India, designed to provide financial stability to employees during retirement and emergencies. Managed by the Employees’ Provident Fund Organisation (EPFO), PF ensures savings throughout an employee’s career, creating a safety net for the future.

What is a Provident Fund?

The PF is a retirement benefit scheme where both employer and employee contribute a fixed percentage of the employee’s basic salary and dearness allowance. These contributions accumulate with interest, offering a significant corpus over time.

Why is PF Important?

PF isn’t just a deduction from salary—it’s a powerful financial tool that offers:

• Retirement security – A steady income post-employment.

• Emergency support – Partial withdrawals for housing, medical needs, or education.

• Tax benefits – Contributions are eligible for deductions under Section 80C.

Benefits of PF for Employees

• Financial Discipline: Regular savings encourage long-term planning.

• Government-Backed Security: Safe, reliable, and risk-free savings option.

• Employer Contribution: Doubles the savings impact.

• Pension & Insurance Benefits: Linked with EPS (Employee Pension Scheme) and EDLI (Insurance).

Key Rules and Compliance

• Eligibility: Mandatory for organizations with 20+ employees.

• Contribution Rate: Generally, 12% of basic salary each from employer and employee.

• Withdrawal Rules: Allowed for retirement, unemployment (after 2 months), or emergencies.

• Universal Account Number (UAN): Ensures easy portability across jobs.

Modern Relevance of PF

With job changes becoming common, PF portability ensures employees don’t lose their savings. The digital platforms provided by EPFO have made PF management easier with online balance checks, claim settlements, and transfers.

Conclusion

Provident Fund is more than a statutory requirement—it is a cornerstone of financial security. By contributing regularly, employees build a retirement corpus, gain tax benefits, and stay prepared for unforeseen needs. For organizations, timely PF compliance builds trust and ensures legal safety, making PF a win-win for all.

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Payroll: The Core of Employee Satisfaction and Business Compliance

Payroll is not just about disbursing salaries; it is the process that ensures employees are paid correctly, statutory obligations are met, and businesses operate smoothly. A well-managed payroll system builds trust, enhances employee satisfaction, and safeguards an organization against compliance risks.

What is Payroll?

Payroll refers to the complete process of calculating employee compensation, managing deductions, filing statutory contributions, and issuing payslips. It goes beyond payment and involves maintaining records, ensuring accuracy, and adhering to government regulations.

Key Components of Payroll

• Gross Salary: Total compensation including basic pay, allowances, and incentives.
• Deductions: Taxes, Provident Fund (PF), Employee State Insurance (ESI), professional tax, and other statutory contributions.
• Net Salary: The actual take-home pay after deductions.

Why Payroll Matters for Businesses

• Legal Compliance: Accurate payroll processing ensures adherence to labor laws and tax rules.
• Employee Trust: On-time and error-free salary payments foster loyalty.
• Operational Efficiency: Automating payroll reduces manual errors and saves time.

Common Challenges in Payroll

• Frequent changes in tax and labor laws.
• Manual errors during salary calculation.
• Managing multi-location compliance for large organizations.
• Maintaining transparency with employees regarding deductions.

The Role of Technology in Payroll

Modern payroll software integrates with HR and accounting systems, automating calculations, tax filing, and compliance. Features like employee self-service portals and mobile access empower staff to view payslips, PF details, and tax information without depending on HR.

Conclusion

Payroll is the backbone of any organization’s workforce management. By investing in accurate and efficient payroll systems, businesses not only ensure compliance but also strengthen employee trust. Ultimately, smooth payroll management is a win-win, securing both organizational growth and employee satisfaction.

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