ESI: The government has introduced a significant update for employees and their families in the revised labor code. Now, the advantages of social security programs like the Pension Fund (PF) and the Employees’ Insurance Scheme (ESI) will also extend to other family members who rely on the employee, including grandparents, parents-in-law, and unmarried siblings.
To achieve this, the definition of family has been expanded in the new labor law. This modification, included in the Social Security Code 2020, seeks to safeguard the actual dependents of the employee. In the past, only spouses, children, parents, and unmarried daughters qualified for these benefits. Courts frequently restricted nominations beyond this provision, often leaving out family members who were financially or socially reliant on the employee from receiving benefits. The new regulations now allow all these individuals to be recognized as beneficiaries.
Who will be included?
The updated definition now encompasses the grandparents of all employees. Additionally, any minor, unmarried brother or sister who is fully dependent on the employee will also be recognized. Female employees can now list their parents-in-law as dependents, which was not an option before.
Members will only be able to include those who are genuinely financially dependent on them. Documentation may be necessary to validate this dependency. If the employee’s marital status changes, such as through separation or divorce, the in-law’s eligibility for benefits may typically be revoked.
What has changed now?
In the past, only spouses, children, parents, and unmarried daughters were acknowledged as family members. Now, grandparents, dependent younger brothers, or unmarried sisters are included for all employees. For female employees, parents-in-law have also been added.
You will benefit from this
This new regulation will be applicable to all major government programs, including the Employees’ Insurance Scheme (ESIC), pension fund, gratuity, and accident compensation. Regardless of the employee’s personal situation, this change aims to provide broader support for families.