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Analysis_ Code on Social Security, 2020 (3) (1)

The Code on Social Security, 2020 is a significant reform in India's labor laws, consolidating nine central laws to extend comprehensive social security coverage to all workers, including those in unorganized and gig sectors. It establishes key social security bodies like the Central Board of Trustees and the Employees' State Insurance Corporation to administer benefits, while also ensuring maternity rights for women employees. Despite its progressive framework, challenges remain in effectively reaching and enforcing coverage for vulnerable worker segments, necessitating ongoing efforts for compliance and awareness.

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Analysis_ Code on Social Security, 2020 (3) (1)

The Code on Social Security, 2020 is a significant reform in India's labor laws, consolidating nine central laws to extend comprehensive social security coverage to all workers, including those in unorganized and gig sectors. It establishes key social security bodies like the Central Board of Trustees and the Employees' State Insurance Corporation to administer benefits, while also ensuring maternity rights for women employees. Despite its progressive framework, challenges remain in effectively reaching and enforcing coverage for vulnerable worker segments, necessitating ongoing efforts for compliance and awareness.

Uploaded by

Aryan Raman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CODE ON SOCIAL SECURITY, 2020: AN

ANALYTICAL STUDY
INTRODUCTION
The Code on Social Security, 2020 represents a landmark legislative reform in
India’s labor law landscape. It consolidates nine central labor laws, including
key acts such as the Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952, and the Maternity Benefit Act, 1961, into a single, unified
statute. The primary objective of the Code is to extend social security
coverage comprehensively across all workers—spanning the organized,
unorganized, gig, and platform sectors. This consolidation aims to simplify
compliance procedures and harmonize the administration of social security
benefits nationwide, ensuring easier access and broader protection for
diverse categories of workers. By creating a streamlined legal framework, the
Code seeks to promote inclusive welfare, enhance enforcement efficiency,
and address challenges specific to emerging labor segments. This reform
reflects the government’s commitment to providing a balanced, modern, and
accessible social security system that caters to India's evolving workforce.

CHAPTER 1 – PRELIMINARY
Chapter 1 of the Code on Social Security, 2020 lays the foundational
framework governing its application and interpretation. Section 1 specifies
the short title, extent, commencement, and application of the Code:

• Short Title: The Act is formally called the "Code on Social Security, 2020".
• Extent: It extends to the whole of India, establishing a nationwide
legislative reach.
• Commencement: The Code comes into force on a date notified by the
Central Government via the Official Gazette.
• Application: Applies uniformly across all establishments and workers,
ensuring inclusive social security coverage.
Section 2 provides critical definitions that underpin the Code’s
implementation:

• Employee: Any person, other than apprentices, employed on wages by


an establishment—directly or through contractors—engaged in any
skilled, semi-skilled, or unskilled work, including managerial and
technical roles.
• Employer: Includes heads of departments, occupiers, managers,
contractors, or any person responsible for supervision and control of the
establishment.
• Wages: Encompasses basic pay, dearness allowance, and retaining
allowance, excluding bonuses, house rent allowance, and certain other
specified payments.

These definitions form the basis for determining coverage and eligibility
under the Code. Section 3 mandates the registration of establishments
within the prescribed time, ensuring systematic inclusion under the Code.
Registration is vital for regulatory oversight, enforcement of social security
measures, and maintaining an accurate registry. It also provides for
cancellation of registration when an establishment ceases operations or no
longer fits applicability criteria, thus maintaining the integrity of
administrative records and promoting effective governance.

CHAPTER 2 – SOCIAL SECURITY ORGANISATIONS


Chapter 2 of the Code on Social Security, 2020 establishes crucial social
security bodies responsible for administering various welfare schemes,
ensuring structured governance and effective implementation of social
security benefits across India.

CENTRAL BOARD OF TRUSTEES (SECTION 4)

The Central Government is empowered to constitute the Board of Trustees


for the Employees’ Provident Fund, commonly referred to as the Central
Board. This Board administers provident fund schemes, pension schemes,
and insurance schemes established under the Code. Its tripartite composition
includes representatives from the government, employers, and employees,
facilitating balanced policy making and fair administration. The Board ensures
that provident fund contributions are managed responsibly, securing long-
term financial benefits for employees.
EMPLOYEES’ STATE INSURANCE CORPORATION (ESIC) (SECTION 5)

Section 5 mandates the establishment of the Employees’ State Insurance


Corporation (ESIC), a statutory body tasked with the administration of the
Employees’ State Insurance Scheme. ESIC provides a comprehensive suite of
benefits including medical care, cash benefits during sickness or maternity,
disability coverage, and dependent benefits. Its governance structure
includes representatives of central and state governments, employers,
employees, medical professionals, and members of Parliament, ensuring
multidimensional oversight and accountability.

BOARDS FOR UNORGANIZED, GIG, AND BUILDING WORKERS


(SECTIONS 6 AND 7)

• National Social Security Board: Constituted by the Central Government


to recommend and oversee social security schemes for unorganized
workers, as well as gig and platform workers. This Board plays a pivotal
role in policy formulation aimed at extending social protection to
vulnerable and informal sectors.
• State Unorganised Workers’ Social Security Boards: Established by state
governments, these boards advise on welfare measures for unorganized
workers and monitor scheme implementation locally, adapting
strategies to state-specific contexts.
• State Building Workers’ Welfare Boards: Mandated under Section 7,
these boards focus exclusively on building and construction workers,
providing benefits such as health and safety measures, financial
assistance, and pension schemes tailored to this labor-intensive sector.

GOVERNANCE, ACCOUNTABILITY, AND OPERATIONAL


PROCEDURES (SECTIONS 8–10)

To maintain organizational integrity, Section 8 prescribes grounds for


disqualification and removal of members from these social security bodies.
Grounds include insolvency, mental incapacity, conviction for moral turpitude,
or abuse of office, ensuring that members uphold ethical standards.

Section 9 mandates that these organizations conduct their business—such as


meetings, decision-making processes, and record keeping—in accordance
with procedures prescribed by the appropriate government, fostering
transparency and operational efficiency.
Finally, Section 10 designates the Central Provident Fund Commissioner and
the Director General of ESIC as the executive heads of their respective bodies.
These officials are responsible for day-to-day administration, implementation
of schemes, and ensuring compliance with the Code’s provisions, thereby
anchoring the operational framework with professional leadership.

CHAPTER 6 – MATERNITY BENEFIT


Chapter 6 of the Code on Social Security, 2020 consolidates provisions aimed
at protecting the maternity rights of women employees. Section 60
guarantees the right to payment of maternity benefit for a maximum period
of twenty-six weeks, of which not more than eight weeks shall precede the
expected date of delivery. This benefit is calculated based on the average
daily wage of the woman employee during her actual period of absence due
to maternity. The provision ensures that women receive financial support and
job security during this crucial time.

Section 61 addresses the continuance of maternity benefit in certain cases,


such as illness arising out of pregnancy, miscarriage, or medical termination,
thereby extending protections beyond the standard maternity leave.
Together, these provisions play a vital role in promoting women’s welfare,
ensuring paid maternity leave and strengthening workplace protections
against discrimination on the basis of pregnancy or maternity.

CONCLUSION
The Code on Social Security, 2020 stands as a progressive legislative reform,
streamlining diverse social security laws into a unified framework. Chapters 1,
2, and 6 collectively provide clarity in definitions, establish balanced
administrative structures, and protect women’s rights through
comprehensive maternity benefits. This cohesive structure promotes
inclusivity and efficiency in social security governance. However, significant
challenges remain, especially in extending effective coverage to unorganized
and gig sector workers, where enforcement and awareness are limited.
Addressing these gaps requires persistent efforts focused on enhancing
compliance, leveraging technological solutions for registration and grievance
redressal, and conducting widespread awareness campaigns. While the Code
marks an important milestone in labor law reform, its true success depends
on sustained administrative commitment and active stakeholder participation
to realize its full potential in securing social protection for all workers.

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