Code on Social Security, 2020

THE CODE ON SOCIAL SECURITY 2020

The Code on Social Security, 2020 (commonly referred as the Social Security Code) subsumes the following 9 laws:

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

Highlights

• The Code has included fixed-term employees, platform workers, gig workers, inter-state workers etc. in its ambit.
• Section 3 of the Code stipulates that all covered establishments are required to be registered under the Code unless they are already registered under other labour laws.
• It has introduced the term ‘career centre’ meaning any office (including employment exchange, place or portal) established as prescribed by the Central Govt. for providing career services.
• The Code allows for an establishment to voluntarily opt-in or out of coverage of the Employees’ Provident Fund (Chapter III) and Employees’ State Insurance Scheme (Chapter IV), even if the number of employees is less than the specified threshold. This provision has been inserted as an afterthought in the context of the pandemic.
• Section 53(2) of the Code provides that in the case of fixed-term employees, gratuity shall be paid on a pro-rata basis and not on continuous service of five years.
• The Code empowers the Central Government. to frame social security schemes for unorganized workers, gig workers, and platform workers as well as members of their families with respect to providing benefits under the Employees’ State Insurance Corporation (ESIC).
• The Code also lays down penalties and offences. Highlights are- Section 134 which talks about penalties for repeat offenders and Section 137 which allows the employer an opportunity to correct non-compliance for any offence under the Act prior to initiation of prosecution or proceedings.
• A provision has been made under Section 144 wherein employers’ or employees’ contributions may be deferred or reduced for a period of three months in the event of a pandemic, endemic or national disaster.

The goal of this Code is to extend social security to all employees and workers either in the organized, unorganized sector or any other sector. It also includes gig workers (persons who perform work or participate in a work arrangement and earn from such activities outside of a traditional employer-employee relationship) and platform workers (a work arrangement where workers or individuals/ organizations use the online platform to solve specific problems or to provide specific services or any other such activity in exchange of payment). Hence, the SS Code has not only extended social security coverage to more employees but has also enhanced the coverage.

                                                                                                                                                           

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