Detailed Summary of the Code on Social Security
Detailed Summary of the Code on Social Security
Framework
The Code on Social Security, 2020 (SS Code) aims to amend and consolidate laws
related to social security in India.
It seeks to extend social security coverage to all employees and workers, whether in
organized, unorganized, or other sectors.
The SS Code was passed by the Lok Sabha on September 22, 2020, and by the
Rajya Sabha on September 23, 2020, but is yet to receive the President’s assent.
The Central Government will determine the date when the Code comes into force.
The SS Code consolidates and replaces nine central labor laws related to social security:
1. Applicability
o The Code applies to every establishment that meets a minimum threshold of
employees.
o Employers are required to register their establishments within a prescribed
time.
o Employers must maintain records, issue wage slips, and file returns
electronically.
2. Employees’ Provident Fund (EPF)
o Applicable to establishments with 20 or more employees.
o Contributions:
Employer: 10% of wages
Employee: 10% of wages (with an option to contribute more)
Central Government may prescribe a higher rate of 12% for certain
establishments.
o Portability: Employees can transfer their provident fund accounts when
changing jobs.
o Self-Employed Workers: The Central Government may frame schemes for
their social security benefits.
3. Employees’ State Insurance Corporation (ESIC)
o Applicable to:
Establishments with 10+ employees (except seasonal factories).
Hazardous workplaces (even with 1 employee).
Employers in plantations (if they opt-in).
o Employees' Contributions & Fund
Employer and employee contribute to the Employees’ State
Insurance Fund.
The fund covers medical benefits, allowances, and compensations.
o Penalty for Employers: If an employer fails to contribute, the Corporation
may recover the benefit cost.
4. Gratuity
o Applicability:
Factories, mines, oilfields, plantations, ports, railways.
Shops or establishments with 10+ employees.
o Eligibility:
5 years of continuous service (except for certain cases like death,
disablement, or fixed-term employment).
Journalists qualify after 3 years.
o Calculation:
Gratuity is calculated at 15 days’ wages per completed year of
service.
5. Maternity Benefits
o Applicability: Workplaces with 10+ employees.
o Key Benefits:
26 weeks of paid maternity leave (8 weeks before delivery).
Medical bonus of ₹3,500 (or higher as notified).
2 nursing breaks daily for mothers until the child is 15 months old.
Mandatory crèche facility in establishments with 50+ employees.
6. Employee Compensation
o Applicable to employees not covered under ESIC.
o Employers must compensate workers for workplace injuries or occupational
diseases.
7. Social Security for Construction Workers
o Cess Collection:
1-2% of construction cost to fund welfare schemes for workers.
Employers must self-assess and pay cess within 60 days of project
completion.
8. Unorganized, Gig, and Platform Workers
o Definitions:
Unorganized Workers: Self-employed or casual laborers.
Gig Workers: Temporary, on-demand workers (e.g., Uber drivers,
Swiggy delivery partners).
Platform Workers: Those earning via digital platforms.
o Funding for Welfare Schemes:
Contributions from government, employers, and beneficiaries.
Aggregators must contribute 1-2% of their annual turnover.
9. Employment Information and Career Centres
o Career Centres will register job seekers and provide employment-related
data.
o Employers must notify vacancies to Career Centres but are not obligated to
hire from them.
To make the SS Code easier to understand and engaging for students, follow this
structured teaching approach:
V. Conclusion
The Code on Social Security, 2020 is a major reform that simplifies labor laws and
expands benefits to a wider workforce.
It particularly addresses social security gaps for gig workers, self-employed
individuals, and unorganized workers.
The success of the SS Code will depend on effective implementation, employer
compliance, and worker awareness.