Last updated: January 13th, 2023 9:26 AM

Code on Social Security 2020

Finally, on 28^th September 2020, the Code on Social Security 2020 received Presidential Assent. The new code replaces the erstwhile Code on Social Security 2019. Interestingly, the Code on Social Security 2020 subsumes nine regulations relating to employee benefits, retirement, and social security. The present article briefly highlights the key points of the newly introduced Code on Social Security 2020.

List of regulations subsumed in Code on Social Security 2020

Following nine regulations are consolidated into the Code on Social Security 2020-

1. The Employees’ State Insurance Act, 1948.
2. The Employees’ Compensation Act, 1923.
3. The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952.
4. The Payment of Gratuity Act, 1972.
5. The Maternity Benefit Act, 1961.
6. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959.
7. The Building & Other Construction Workers Welfare Cess Act, 1996.
8. The Cine Workers Welfare Fund Act, 1981.
9. The Unorganized Workers’ Social Security Act, 2008.

Applicability of Code on Social Security 2020

The Code on Social Security 2020 specifies different applicable thresholds for the scheme. Some are illustrated hereunder-

Particulars	Applicability
Code on Social Security	Any establishment subject to threshold limit to be notified.
Employees’ Provident Fund	An establishment having twenty or more employees.
Employees’ State Insurance Corporation	An establishment having ten or more person other than a seasonal factory. An establishment with even a single employee carrying on hazardous/ life threatening occupation.
Gratuity	Every mine, factory, plantation, oilfield, port or railway company; and Every shop/ establishment having ten or more employees.
Maternity benefit	Every factory, mine, plantation and any government establishment; and Every shop/ establishment having ten or more employees.
Social Security for Unorganized Workers’	Gig worker, Unorganized sector/ worker, platform worker.
Social Security & Cess in respect of Building & other Construction Workers	Every establishment falling under the building & other construction work.

Notably, all the eligible establishments are liable to register under the Code on Social Security 2020 unless they are already registered under any other law.

Salient features of Code on Social Security 2020

Some of the salient features of the Code are highlighted hereunder-

• Formation of various bodies (i.e. Social Security Organizations) under the Code.
• Employees’ State Insurance Corporation-
  • Code permits voluntary registration under the Employees’ State Insurance.
  • The Employees’ State Insurance Fund shall be used for the following purpose only-
    • Payment of benefits and provision of the medical treatment to an insured person.
    • Establishment/ maintenance of hospitals/ dispensaries and provision of medical and other ancillary services for the insured person.
    • Payment of fees/ allowance to the members of the corporation and committee members.
    • Meeting the audit cost, employees’ insurance court cost, expenditure for improvement of the health and welfare of the insured persons etc.
    • Payment of salaries and other office expenses of the corporation.
    • Payment of sum under any contract or decree.
  • The employer shall pay in respect of each and every employee (whether directly employed by him or by the contractor) both the employee’s as well as the employer’s contribution.
  • The employer/ contractor is not entitled to deduct the employer’s contribution from the wages payable to an employee.
• Social security for Platform Workers, Unorganized Workers and Gig Workers-
  • The Central Government will notify suitable welfare scheme for platform workers, gig workers and unorganized workers on a matter like old age protection; life and disability cover; education; health and maternity benefits, etc.
  • The State Government will notify suitable welfare scheme for unorganized workers on a matter like old age homes; housing; provident fund; employment injury benefits; education schemes for children, etc.
  • Every platform workers, gig workers and unorganized workers are required to obtain registration on fulfilment of following conditions-
    • The worker has completed sixteen years of age or any other prescribed age; and
    • The worker has submitted a self-declaration containing all the information prescribed by the Central Government.
• Maternity benefits-
• • • Every woman shall be eligible for payment of maternity benefits at the rate of an average daily wage during the period of actual absence.
    • A woman is eligible for a maximum period of twenty-six weeks of maternity benefits. Whereas, the maximum period of maternity benefits for a woman having two or more surviving children shall be twelve weeks.